Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

UNITED REFORMED CHURCH BILL [Lords]

Order for consideration, as amended, read.

To be considered tomorrow

HUMBERSIDE BILL [Lords] (By Order)

Order for consideration, as amended, read.

To be considered upon Thursday.

Oral Answers to Questions — DEFENCE

North Atlantic Treaty Organisation

Mr. David Atkinson: asked the Secretary of State for Defence if he is satisfied with the degree of co-operation between North Atlantic Treaty Organisation countries in policies relating to the sale of defence technology.

The Under-Secretary of State for Defence Procurement (Mr. Geoffrey Pattie): The sale of defence technology to Communist countries is kept under constant review in consultation with our allies, and co-operation is very close.

Mr. Atkinson: Does my hon. Friend accept that past sales of Western technology to the Soviet Union have contributed to the enhancement of the effectiveness of the Soviet war machine? Will he now discuss as a matter of urgency with his NATO colleagues the radical reform of COCOM to ensure the effective embargo on strategic technology to the Soviet Union?

Mr. Pattie: It would be impossible to give a blanket acceptance of what my hon. Friend says, although there is no doubt that over a period of time the Soviet Union has been able to acquire, by a variety of means, advanced weapon technology as opposed to equipment. With regard to COCOM, we need to balance genuine and legitimate trading interests with the desire not to sell to the Soviet Union technology that it would obviously turn to its advantage. We shall certainly keep the matter closely under review.

Mr. Robert Atkins: Has my hon. Friend had any success with exploring the terms of memoranda of understanding within NATO countries, which at the moment are apparently preventing the sale of some

technology, not to countries of the Warsaw Pact but to free world countries outside that bloc which might want to buy technology but at the moment are prevented from doing so?

Mr. Pattie: I think that I know the areas to which my hon. Friend is referring. It is a matter for the countries concerned to draw up each memorandum of understanding prior to signing. It is important, when any memorandum of understanding is drawn up, that the considerations to which my hon. Friend refers are taken properly into account.

Mine Counter-measures Vessels

Mr. Hardy: asked the Secretary of State for Defence how many vessels are currently available for mine counter-measure activity.

The Under-Secretary of State for the Armed Forces (Mr. Philip Goodhart): Thirty-four.

Mr. Hardy: Does not that answer illustrate the inadequacy of Government policy and justify yesterday's comment that it is a dangerous gamble with national security? Is there now, or will there be when Trident enters service—if it does—an adequate mine counter-measure capability?

Mr. Goodhart: I should have hoped that the hon. Gentleman would welcome the passage in the latest statement on defence that says that the number of mine counter-measure vessels will be increased.

Mr. Stephen Ross: Since the Under-Secretary takes the view that surface ships are now too vulnerable and too costly to be used for the sophisticated mine warfare that we are likely to experience in any future combat, what role is being envisaged for hovercraft in this capacity? If things that go over or under water are now to have priority, surely hovercraft should come into consideration.

Mr. Goodhart: Hovercraft evaluation has been continuing for some time, but the basic problem is that the sonars needed in the mine-sweeping role cannot operate effectively at the speed of the hovercraft. However, we hope that that problem will be solved soon.

Mr. Cormack: How many vessels will be available for the Falkland Islands patrol? Can my hon. Friend confirm that there will be no question of withdrawing that patrol?

Mr. Goodhart: Certainly there will be no mine-sweeping facilities for the Falkland Islands patrol. That question is still under consideration, and I have no doubt that it will be touched on in tomorrow's debate.

Type 42 Destroyers

Mr. Farr: asked the Secretary of State for Defence if he will make a statement on modernisation of type 42 destroyers and future plans in this respect.

The Minister of State for the Armed Forces (Mr. Peter Blaker): As was explained in the recent White Paper on the defence programme, we shall not be proceeding with plans for the major mid-life modernisation of the type 42s. They will continue to receive normal refits.

Mr. Farr: Is my hon. Friend absolutely sure that it is the right decision to cut off the mid-life modernisation of the valuable type 42 destroyers? Does he not feel that it


would be more appropriate gradually to phase it out? Fewer implications would be involved for the work force by doing that than by simply cutting it off.

Mr. Blaker: The matter was gone into in our debate on the White Paper, and it might arise in tomorrow's debate. But my hon. Friend should consider the total concept of the Government's maritime policies. I expect that the type 42s will still be in service in the late 1990s.

Mr. George Robertson: If there is to be no mid-life modernisation or replacement of the type 42s and the Government are to keep to their NATO commitment of 50 ships, clearly, by the mid-1980s, they will have to start ordering at least three of the new type 23 ships each year. Since no orders have yet been placed even for those ships that were announced in the recent statement, will the Government be content to sit back, as British shipyards close, and dither about a decision on future shipbuilding orders?

Mr. Blaker: Of course we are not sitting back. We have given the commitment. My right hon. Friend was explicit about maintaining 50 vessels, and we shall do what is necessary to maintain that commitment.

Sir Patrick Wall: Is it not a fact that the earlier vessels of the class had to have their hulls lengthened by some 40ft to improve their sea-keeping qualities? Is that very important modification not now to be carried out?

Mr. Blaker: As I understand it, no.

Medium-range Nuclear Missiles

Mr. Frank Allaun: asked the Secretary of State for Defence if he will hold discussions with defence Ministers of other countries regarding medium-range nuclear missiles in Europe.

The Secretary of State for Defence (Mr. John Nott): I am due to meet other NATO defence Ministers at the autumn meeting of the nuclear planning group. This is the principal NATO forum for discussion of such matters, but no firm agenda for the meeting has yet been fixed.

Mr. Allaun: Would not the deployment of cruise and Trident missiles on British territory make our country far more vulnerable—in fact, a priority target for retaliation? Does the Secretary of State accept that the latest public opinion polls show a majority of the British people in favour of that view?

Mr. Nott: No. In my opinion, the deployment of cruise missiles will make this country far less vulnerable. With regard to opinion polls, I have the New Society poll and the Marplan polls of November and April in front of me. I can see no evidence whatever in any recent poll to sustain the hon. Gentleman's opinion.

Mr. Trippier: Will my right hon. Friend take this opportunity to remind Left-wing members of the Labour Party that Soviet military literature is full of references to nuclear weapons being used as primary aggressive forces, which is completely contrary to the principles of deterrence in the West? Is it not therefore essential that we should do all that we can to convince the Russians that they could not possibly succeed in such an attempt, and deter them from trying?

Mr. Nott: I do not think that the facts put forward by my hon. Friend are of much interest to some members of the Labour Party. But I agree with what he said.

Mr. Cryer: Is it not true that the cruise missile would make us more, not less, vulnerable, that it would be entirely under United States control without any right of a United Kingdom veto, and that under presidential directive 59 that could involve United States aggression? Is it not also true that cruise missiles are not verifiable, and that they therefore represent a potential escalation in the nuclear arms race?

Mr. Nott: I believe that word "rubbish" is not parliamentary language, and therefore I cannot use it. I advise the hon. Gentleman that I totally disagree with all those assertions—

Mr. Cryer: Just give the facts.

Mr. Nott: —and the answer to questions about the cruise missiles is well known to the House. There would have to be a joint decision by the British and American leaders before those missiles could be used.

Sir John Biggs-Davison: In view of what the hon. Member for Keighley (Mr. Cryer) said about American control, does my right hon. Friend know whether the Leader of the Opposition expressed solidarity at the Socialist International with the Socialist Government of France in their determination to maintain military nuclear independence?

Mr. Nott: I hope very much that the Leader of the Opposition will have the pleasure of meeting President Mitterrand fairly soon, because I think that an exchange of opinion between them about the balance in Europe would be useful and interesting.

Mr. Cryer: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek to raise the matter on the Adjournment.

Defence Review (Research and Development)

Mr. Geoffrey Johnson Smith: asked the Secretary of State for Defence what effect the recent defence review will have on the percentage of the defence budget spent on research and development.

Mr. Pattie: It is too early to give the Government's decisions on reshaping the defence programme. These are being translated into detailed plans, including the size and shape of our future research and development effort.

Mr. Johnson Smith: Is my hon. Friend satisfied that we are getting value for money in research and development, bearing in mind that for many years, under different Administrations, we have been spending a greater proportion of our military budget on R and D than even the United States?

Mr. Pattie: It is very difficult always to be certain that all of the money being spent on research and development is giving us full value. However, we are keeping this matter under close review, and, following the recent White Paper, it has been the subject of further studies. I am taking a strong personal interest in it.

Mr. Dormand: Does the Minister agree that one of the most important aspects of development is the continued


existence of the Air Training Corps? In those circumstances, what possible justification can there be for combining the Durham wing of the ATC with the Northumberland ATC? Is the Minister aware of the tradition and enthusiasm of the Durham ATC? Does he agree that financial savings would be negligible? Will he reconsider that decision?

Mr. Pattie: Much as I have sympathy with the hon. Gentleman, following the recent ministerial reorganisation that is not a matter which is properly for me. I admire the hon. Gentleman's ingenuity in managing to introduce the subject of the Air Training Corps under the question of research and development.

Mr. Speaker: Order. The Minister ought to congratulate me.

Mr. Robert Atkins: In view of the declining percentage of the defence budget spent on production technology in this country compared with that of the United States, Japan, France and Germany, when does the Minister expect to be able to announce proposals along the lines of the American Government—for example, to spend money in defence industries on production technology?

Mr. Pattie: My hon. Friend and I have corresponded on this important question and, as I have told him previously, this is also the subject of further studies. I do not in any way minimise the importance of production technology, and I hope that we shall be making an announcement in the not-too-distant future.

Mr. John: Will not the Government's announcement regarding Royal ordnance factories and their proposals for them have the effect of cutting defence R and D? Will the Minister be less coy about the White Paper and quote some figures or percentages as to how the White Paper will affect R and D? As yet, we have had no figures of any kind relating to that White Paper.

Mr. Pattie: As I said in my original answer—which the hon. Gentleman may not have heard—we have not yet worked out the full implications for the research and development budget of the defence programme, because we considered that it was important to get the central programme structured first. I do not accept the hon. Gentleman's other point that any question of the future reorganisation of the Royal ordnance factories will necessarily mean that there will be any reduction in overall R and D.

Public Weather Forecasts

Mr. Warren: asked the Secretary of State for Defence if he will make a statement on the accuracy of public weather forecasts.

Mr. Goodhart: During the past 12 months, I am told that the public weather forecasts issued by the Meteorological Office have achieved a mean accuracy nationally of 83 per cent. The forecasts issued on BBC Radio 4 at 17.55 for 30 hours ahead had an 80 per cent. accuracy, whilst those issued at 07.55 for the following 16 hours had an 86 per cent. accuracy. Improved technology such as rainfall radars, satellite imagery and faster computers should contribute to an improvement in medium-range forecasts next year.

Mr. Warren: How does my hon. Friend know that those figures are right? Also, will he accept that the rain-soaked British public simply will not believe them this summer? Could we possibly have happier-looking chaps on television telling us about their depressions?

Mr. Goodhart: The only people nationally who are capable of checking on the Meteorological Office forecasts are those at the Meteorological Office. As for people looking brighter when giving forecasts, it would not be appropriate, if there were storms ahead, for forecasters to look too happy. But I think that they would appreciate more time on the BBC and on the media as a whole so as to have the opportunity of giving more precise forecasts than they can at present.

Mr. Robert C. Brown: Is the Minister aware that continuing suggestions that there should be privatisation of Royal ordnance factories are causing fairly stormy scenes—

Mr. Speaker: Order. I fear that matters are about to get stormier. The hon. Gentleman had better look for fine weather linked with question no. 6.

Mr. Brown: I relate it to question no. 6, Mr. Speaker. In precisely eight minutes' time, a meeting is due to start at Birtley in Tyne and Wear which will guarantee squalls for the Minister and his colleagues in future.

Mr. Goodhart: As you said before, Mr. Speaker, I should congratulate you rather than—in this case—the hon. Member for Newcastle upon Tyne. West (Mr. Brown).

North Atlantic Treaty Organisation (France)

Sir Anthony Meyer: asked the Secretary of State for Defence if he will hold discussions with his French colleague on possible methods of ensuring closer integration of the French defence effort with a European tier of the North Atlantic Treaty Organisation.

Mr. Nott: Such meetings are held from time to time to discuss a wide range of issues concerning Alliance security. I should welcome the opportunity of a discussion with M. Hernu as soon as a meeting can be arranged.

Sir Anthony Meyer: In view of the evident awareness of the new French Government of the need for armed preparedness, will my right hon. Friend take every, opportunity to explore closer co-operation? Does not the determination of President Mitterrand to ensure that effective nuclear deterrence is maintained in Western Europe contrast glaringly with the readiness of the Opposition and their Leader to hand this country and its freedoms over to the first dictator who cares to mount a takeover?

Mr. Nott: As I said, I welcome an opportunity of meeting my French opposite number. I agree with my hon. Friend that many of the statements made on security matters by the new French Government are extremely welcome and encouraging to the British people, with the exception of very few who are in a minority in taking a rather different view.

Dr. David Clark: When the Minister meets his French counterpart, what will be his position on the excellent French proposals made at the Madrid conference for confidence-building and verification measures?

Mr. Nott: As the hon. Gentleman knows, we have supported the French proposals for this conference and will continue to do so.

Mr. Buck: Whilst welcoming the fact that my right hon. Friend hopes to see his French opposite number before long, may I ask him to confirm meanwhile that on an inter-Service basis there is still enormous co-operation between us and the French, that there are more trips by Atlantique aircraft out of St. Mawgan than there are by Nimrods, and that the French forces are practically regarded as the masse de manoeuvre for NATO, of which, of course, France is still a member, although, regrettably, not part of the integrated structure?

Mr. Nott: As my hon. and learned Friend says, France is a totally loyal and wholly committed member of the Atlantic Alliance. It is not a member of the integrated military structure, but it works extremely closely with all NATO countries, and the links that we have with the French military forces at Service level are extremely close.

Hong Kong (Infantry Battalion)

Mr. Hooley: asked the Secretary of State for Defence what is the purpose of sending a battalion of infantry to Hong Kong.

Mr. Blaker: An additional infantry battalion will be stationed in Hong Kong from next spring to enable the garrison to meet all its commitments.

Mr. Hooley: What is the purpose of sending highly trained Service men 10,000 miles to a place that has not the remotest relevance to the defence of the United Kingdom? If those people are surplus to local requirements, might it not be better to offer them in support of the United Nations peacekeeping force in the Middle East rather than stationing them in Hong Kong?

Mr. Blaker: This decision results from a careful review of the needs of Hong Kong which has taken place over the past year or so. The purpose of the garrison and of its reinforcement is to demonstrate the British Government's commitment to the integrity and the security of Hong Kong.

Mr. Hal Miller: Will my hon. Friend agree that it is most important that our commitment to Hong Kong should be demonstrated and that the assurance of the population in the continued protection of that territory is largely dependent on the garrison being maintained there?

Mr. Blaker: I agree entirely with my hon. Friend. We have responsibilities to Hong Kong which we intend to honour. What is more, Hong Kong is very important to Britain, among other things, as an export market. I believe that it is our second most important export market in Asia.

Mr. Arthur Davidson: How much of the time of our Armed Forces in Hong Kong is spent checking illegal immigrants from China? Is not too much time spent on that exercise, to the detriment of other important duties? Can the Minister also say how the cost is borne between the Hong Kong Government and this Government?

Mr. Blaker: As the House knows, last year and the year before, much of the garrison's time was spent dealing with the problem of illegal immigration from China. Fortunately, because of the measures taken by the Hong Kong Government late last year, that problem is much

reduced. When it was at its most severe, the garrison was severely overstretched. That is one reason for providing an additional battalion.
There is now a new defence cost agreement which means that Hong Kong will pay 75 per cent. of the cost of the garrison. That is more beneficial and fairer than the previous agreement, which left out of account some costs that fell on the United Kingdom Government.

Trident

Mr. Marlow: asked the Secretary of State for Defence if he will make a statement on the progress of the Trident project.

Mr. Nott: The Trident project is proceeding according to plan. Orders for long-lead material have already been placed in the United States; planning proposals have been put to local authorities for a support base in Scotland; and a decision on the design of the Trident submarine will be made as soon as possible.

Mr. Marlow: How does my right hon. Friend compare the deterrent effect of an independent British nuclear arm with conventional forces, and how does he compare the cost?

Mr. Nott: I do not think that there is any doubt that, from a cost-effective point of view, Trident has an immeasurably greater deterrent effect than spending an equivalent amount on conventional forces.

Mr. Stoddart: But is not the Government's preoccupation with Trident leading to their wilful neglect of our real defences, particularly of the Royal Navy, as well as making this country open to and the first target of any nuclear war?

Mr. Nott: This Government are no more preoccupied with Trident than the previous Government were preoccupied with Polaris and the modernisation of Polaris with Chevaline. We have had an independent strategic nuclear deterrent under all parties for many years, and there is no change in policy in continuing with it.

Mr. Archie Hamilton: Is my right hon. Friend aware of the worries about the cost of Trident and the pressures that it will bring to bear on other parts of our defence expenditure, and, consequently, how essential it is that it keeps within its original cost budget?

Mr. Nott: Of course, I am aware that various people have expressed concern about the impact of Trident on the equipment programme. But, as I have already said, in terms of its capacity to prevent war and maintain peace, I cannot think of any other form of expenditure that conceivably could be as effective as Trident.

Mr. John: If other projects, notably Chevaline, have, to quote the Secretary of State's graphic economic phrase, "gone bananas", what steps does the right hon. Gentleman intend to take to prevent this system from doing the same?
When will the right hon. Gentleman announce which type of Trident missile this country will acquire? Will it be mark 1 or mark 2? The size of boat that we build will depend on that decision.

Mr. Nott: I made a comment on the cost of Chevaline, which escalated from the original estimates primarily, I believe, under the Labour Government. In the past three years, the estimate has remained roughly the same at £1


billion. I made that comment in an attempt to explain that that was an argument for buying a known and proven system—Trident—rather than attempting on our own to embark on highly advanced technological weapon systems such as Chevaline.

Early Warning System

Mr. Leighton: asked the Secretary of State for Defence how long a warning of missile attack the United Kingdom would receive from the early warning system.

Mr. Blaker: As my right hon. Friend the Leader of the House told the House on 21 January 1980—[Vol. 977, c. 80–1.]—assuming a completely surprise attack, which I consider unlikely, and depending on the place of launch, warning time could, in the worst case, be a matter of minutes.

Mr. Leighton: Is it not clear from that reply that the Government's cosmetic pretence of civil defence lacks all credibility, as a recent conference of the British Medical Association emphasised? Is it not true that if six large hydrogen bombs were exploded down the backbone of the country, this island would become a devastated uninhabitable radioactive ruin? In those circumstances, is not the Government's pretence of civil defence nothing more that a cruel hoax?

Mr. Blaker: I do not agree with the hon. Gentleman about civil defence, and, as he knows, that question is a matter for my right hon. Friend the Home Secretary. As for the military purposes of an early warning system, it is an integral part of our policy of deterrence, which relies both on having the ability to retaliate to a degree that would inflict unacceptable damage on any potential aggressor and on having sufficient warning time to identify the source of attack and to take appropriate steps.

Mr. Arthur Lewis: With or without the nuclear deterrent or the Armed Forces, can the Minister really say that we have any defence when, as he told me last week, we spend £170,000 a year to guard Buckingham Palace, yet three people could get in there without any trouble? What are we doing? We cannot defend Buckingham Palace.

Mr. Blaker: No doubt, the hon. Gentleman will raise that most interesting matter on an appropriate occasion.

Defence Sales

Mr. McKelvey: asked the Secretary of State for Defence how many contracts for overseas sales of military equipment were signed during 1980; how many of those contracts were for sums in excess of £1 million; and if he will provide this information for the four previous years.

Mr. Nott: According to information available to the Ministry of Defence, the figures were as follows. The number of contracts signed from 1976 to 1980 were 186, 150, 123, 195 and 287. Contracts over £1 million were 79, 69, 71, 69 and 116.

Mr. McKelvey: Can the Secretary of State tell me how many of those contracts were for the supply of paramilitary or police equipment, and to which countries they were sent?

Mr. Nott: I cannot answer that question without knowing the specific point to which the hon. Gentleman

is referring. However, as he knows, we examine every item of defence equipment sales on a case-by-case basis. We do not sell defence equipment to countries where we think it can be used for purposes of internal repression.

Mr. Jim Spicer: Does my right hon. Friend agree that, in view of the success of his recent trip to the Gulf, it is most important that we encourage people in the Gulf and similar areas to take up orders of that magnitude? Against that background, would it not be sensible for him to make early arrangements for the survey ship HMS "Herald" to proceed to the Gulf at the earliest possible opportunity to carry out the survey work which will do so much good in terms of Oman?

Mr. Nott: With regard to the first point, our forecast defence exports this year will probably be about £1½ billion, which is an increase of about 25 per cent. on the previous year. Those sales provide over 140,000 direct and indirect job opportunities in British industry, as well as giving economies of scale so that we can better afford to buy equipment for our own Armed Forces.
As regards HMS "Herald", I think that my hon. Friend is referring to a civil survey off the Oman coast.

Mr. Spicer: indicated assent.

Mr. Nott: A decision has recently been taken about that, but it may not yet have been announced.

Mr. Flannery: Have any of these armament contracts been made with the brutal dictatorships of, for example, Chile, Argentina or El Salvador?

Mr. Nott: I think that the hon. Gentleman is saying that he is against selling arms to Chile and other such countries.

Mr. Flannery: Dictatorships.

Mr. Nott: I regret that there are many dictatorships in the world, and if we sold defence equipment only to countries with our constitutional arrangements, our sales would be very small.

Mr. Flannery: On a point of order, Mr. Speaker. My question was about three countries and the Minister has not answered it.

Mr. Speaker: That is not a point of order for me.

Shoeburyness Establishment

Mr. Teddy Taylor: asked the Secretary of State for Defence is he will make a statement on the future of the Shoeburyness establishment, and in particular on the disposal of its surplus land.

Mr. Goodhart: On the future of Shoeburyness, I have nothing to add to the answer which I gave my hon. Friend on Tuesday 17 March. As for disposal, we are at the moment engaged in negotiations with Southend borough council about part of the old ranges; and Potton island, may also become surplus in 1984.

Mr. Taylor: Is the future of the proof and experimental establishment at Shoeburyness secure under the revised defence plans, and can my hon. Friend assure us that there will be no delay from the Ministry's point of view on those negotiations? Is it possible that the barge pier will be made available to local fishermen?

Mr. Goodhart: The future of the establishment is assured, as, even if suitable alternative sites were


available, it would be exceedingly costly to remove the equipment. I understand that Southend council wants to keep the barge pier closed and that it hopes to sign a lease for part of the old ranges in the near future.

Chatham Dockyard

Mr. John Wells: asked the Secretary of State for Defence if he will give further details of the proposed time scale for the rundown of Chatham dockyard.

Mr. Blaker: The phasing of the rundown is still to be fully assessed, but the bulk of the rundown in staff is likely to occur in the period April 1982 to March 1984.

Mr. Wells: Is my hon. Friend aware that, so long as the dockyard is still in his hands and not cast off on the PSA or some other Government agency, it is still important that he and his Department provide opportunities for employment within other engineering and similar concerns for those who are being laid off by his Department? Does he agree that, as the present employer, he has a responsibility to assist fresh employers to come in, albeit on Crown property?

Mr. Blaker: I accept the responsibility of the Ministry of Defence to do everything we can to ease the anxieties and problems of the people who work in the dockyard and their families. I pay tribute to my hon. Friends from that area who have taken such a close interest in this problem. I am happy to confirm that we hope to complete the work in hand at Chatham.

Mr. George Robertson: Is it true that HMS "Dreadnought", which was scheduled for a refit at Devonport, has now been told to go to Chatham for refitting and that the management and unions at Chatham dockyard have told the Ministry of Defence to get lost? If it is true, is not that a condemnation of the Government's strategy about the future of the nuclear refitting programme and a vindication of what the Chief of Fleet Support told the Select Committee last week—that the Government are taking an enormous risk with one of our principal defence areas?

Mr. Blaker: I think that if an official spokesman for the Opposition quotes someone who has been speaking to a Select Committee, he should get the quotation right. If the hon. Gentleman examines the record, he will see that he has misrepresented what was said.
As for "Dreadnought", we are not ready yet to make an announcement about the future work load in Chatham, but we hope to do so soon.

Mr. Moate: Does my hon. Friend agree that the Chief of Fleet Support said that the proposed closures of the dockyards were a strategy not without risk? Does he also agree that one of the risks is that in the future, if Chatham is allowed to close, the dockyards will not have the capacity to refit and refuel the SSN fleet?

Mr. Blaker: I think that my hon. Friend, in contrast to the hon. Member for Hamilton (Mr. Robertson), has correctly quoted what was said. In defence policy in particular, any programme one adopts must have some element of risk. We build all our nuclear missile submarines at Barrow. That must involve some sort of risk, but one must consider the alternatives, especially in terms of cost.

Mr. Hooley: While on the subject of dockyards, can the Minister say when he proposes to shut down the dockyard at Gibraltar?

Mr. Blaker: No. We are in consultation with the Government of Gibraltar about the future of that dockyard.

Trident

Mr. McNally: asked the Secretary of State for Defence if he is satisfied that the decision in favour of Trident will not reduce the research and development resources of the United Kingdom's defence-related aerospace industry.

Mr. Nott: Trident is the most cost-effective weapon available for the modernisation of our strategic nuclear deterrent; and 70 per cent. of its cost will be spent in the United Kingdom. I believe that the United Kingdom aerospace industry will have been encouraged by the wide range of improvements in aircraft and associated systems now proposed as a result of my recent review of the defence programme.

Mr. McNally: Is the Secretary of State aware that he has not answered the question and that he certainly will not have removed the fears of the workers in the aerospace industry that, yet again, defence procurement in the United Kingdom—in contrast to the United States—instead of advancing our research and development, is transferring resources to American industry? Will not that have a devastating effect on the British aerospace industry in the 1980s and 1990s?

Mr. Nott: That simply is not true. If the Labour Party came to power and cancelled the Trident system, there would be over £4 billion less work for British industry. In fact, in the aerospace industry, most of the plans that were already in train were confirmed, and therefore a great deal of extra business will flow into that industry, as indeed a great deal of extra business for British industry and workers will result from the Trident programme.

Mr. Onslow: Can my right hon. Friend then tell the House how many jobs in defence-related industries—whether in Trident, or defence sales, or any of the other areas that Labour Members are so keen to attack—are located in the constituencies of Labour Members who are committed to unilateral disarmament?

Mr. Nott: I do not believe that it would be possible to achieve the defence savings that the Labour Party suggests that it would try to make. I think it would be impossible to achieve such savings within the time scale that Labour Members suggest. But if they were to cut the defence programme in any way the effect on jobs in every constituency would be devastating

Mr. Stephen Ross: Will the Secretary of State assure the House that his commitment to Trident will not affect his consideration of the replacement of the Sea King helicopter?

Mr. Nott: The two matters are entirely separate.

Mr. Nicholas Winterton: Will my right hon. Friend confirm, however, that there has been no cutback in the research and development expenditure for British Aerospace defence-related projects? I am sure that he is aware that we must keep very much in advance with research and development if we are to provide the


equipment which we require, which is so valuable as exports and which, as my right hon. Friend rightly said, provides jobs.

Mr. Nott: I cannot make a general statement of that kind. I would say that we are probably spending too great a proportion of our budget on research and development. We certainly spend much more on it than do most of our NATO allies, and there is a limit to what we can do in that direction. We are therefore reviewing our R and D effort in general.

Commissioned Officers (Social Representation)

Mr. Gwilym Roberts: asked the Secretary of State for Defence what are the latest figures available for the proportions of commissioned officers in the Army, Royal Navy and Royal Air Force who were educated in public or private schools; and if he will take steps to make those commissioned in the Armed Forces more socially representative of the population as a whole.

Mr. Goodhart: Accurate information on the educational background of commissioned officers can be obtained only by checking tens of thousands of individual records. However, surveys of officer entrants into all three Services suggest that the proportion of newly commissioned officers educated at independent schools is broadly similar to the proportion of members of the Cabinet in the last Labour Government who went to fee-paying schools.

Mr. Roberts: I fully accept the Minister's point, but does he agree that, as only about 7 per cent. of the population is educated in such schools, and since the proportion is much higher among officers in all the Armed Forces, those officers are socially unrepresentative? Does he also agree that that creates a problem, as they are out of touch in many ways with ordinary people, as are the bulk of Tory Members?

Mr. Goodhart: The object of the rigorous selection system adopted by all three Services is not to favour a particular social group but to find the best possible leaders.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Butcher: asked the Prime Minister if she will list her official engagements for Tuesday 21 July.

The Secretary of State for the Home Department (Mr. William Whitelaw): I have been asked to reply.
My right hon. Friend is taking part in the economic summit in Ottawa.

Mr. Butcher: Does my right hon. Friend agree that the demolition of large areas of our inner cities has destroyed the natural habitat for small businesses, and that until the planners reverse that trend and local authorities reduce their demands on commercial and industrial ratepayers, the exodus of small businesses from our urban areas will continue?

Mr. Whitelaw: I agree entirely that the inner cities are a most important area for small businesses. That is why the Government have set up the land register scheme, and teams of three local people will monitor developments. Of course, my hon. Friend is right about high rates. Those

Labour authorities in inner city areas which insist upon high rates to cover extravagant expenditure had better realise that they are destroying jobs at the same time.

Mr. Foot: Has the right hon. Gentleman had an opportunity to discuss with the Prime Minister in Ottawa the terrible unemployment figures published today? Can he now explain why this country should suffer so much more in that respect, with all the human misery involved in those figures, than any of the other countries represented at the Ottawa conference? Can he tell us also whether the Government as a whole now accept the suggestion by the Secretary of State for Employment that we are heading for the terrible official figure of 3 million unemployed?

Mr. Whitelaw: The answer to the right hon. Gentleman's first point is "No, Sir." On his second point, of course the figures are serious, and the position of this country is bad, but let us be clear that that is due to years of problems and years of Socialist Government. Let no one imagine that the problems faced today in the competitive power of British industry do not lie at the door of the right hon. Gentleman and all that he did when Secretary of State for Employment.

Mr. Foot: The right hon. Gentleman has not studied the figures properly. Prior to the arrival of himself and his fellow Ministers on the Treasury Bench, we were doing better than some of those other countries. Now we are doing infinitely worse than all the other great industrial countries. The right hon. Gentleman has not replied to my charge that we are heading for the 3 million figure. What has he to say about that? Before the House adjourns for the Summer Recess the matter must be debated, and the Opposition will table a motion of censure on the Government.

Mr. Whitelaw: If the right hon. Gentleman decides to put down a motion of censure, my right hon. and hon. Friends will respond to it. The last time that we had such a debate, the right hon. Gentleman made a pretty poor show. He offered no sensible proposals to deal with our problems. Therefore, he should be careful before he mounts such an attack again.
As to the figure of 3 million unemployed, my right hon. Friend the Secretary of Stale for Employment has made clear the risks attached to the present position. I have nothing to add to what he has said.

Mr. David Steel: Is the Home Secretary aware that among the unemployment statistics are some 69,000 school leavers who signed on the register last month?

Mr. Cryer: The right hon. Gentleman supports compulsory selection in Croydon.

Mr. Speaker: Order. The hon. Member for Keighley (Mr. Cryer) is being very unfair to a right hon. Member who is trying to put a question.

Mr. Cryer: I was reminding the right hon. Gentleman of a few home truths.

Mr. Steel: What advice does the Home Secretary have to give to those 69,000, considering that not only can they not get a job but that now, under the new rules, they cannot even draw supplementary benefit until September?

Mr. Whitelaw: The Government, through the youth opportunities programmes and—much more important in


the long term for our country—expanded training opportunities, are doing everything that they can to help the position of those people.

Mr. Charles Morrison: Has my right hon. Friend noticed that England has just won the Test Match? Will he congratulate Ian Botham and the England team? Does not their achievment demonstrate again how often it is possible to snatch victory out of the jaws of defeat by a combination of applied ability and changed tactics?

Mr. Whitelaw: I agree with my hon. Friend about a remarkable achievement. There are many remarkable achievements in this country which right hon. and hon. Members on the Opposition Benches never seem likely to recognise.

Mr. Canavan: asked the Prime Minister what are her official engagements for 21 July.

Mr. Whitelaw: I have been asked to reply.
I refer the hon. Gentleman to the reply which I have just given.

Mr. Canavan: Now that the Government have brought unemployment even closer to 3 million and brought parts of our country so close to anarchy that our policemen are being sent to places such as Hong Kong and Belfast for anti-riot training, is this not the time for the rest of the Cabinet to get rid of our biggest criminal and the biggest menace to our society, before she gets back from Ottawa?

Mr. Whitelaw: I do not think that the level of the hon. Gentleman's question deserves a serious reply.

Mr. Robert Atkins: Has my right hon. Friend seen the recent opinion poll which suggests that nearly three-quarters of the population favour the retention of independent public schools, and that 54 per cent. of Labour Party supporters feel the same way? Will he draw this forcibly to the attention of right hon. Gentlemen on the Opposition Benches as well as to the attention of the former right hon. Member for Hitchin, Mrs. Williams, who is pretending that she is also in some way doubtful about public schools?

Mr. Whitelaw: It would not be for me to be doubtful about public schools, would it? I am strongly in favour of what has been said. I am glad to note what has been said in the public opinion survey, and perhaps the House will take notice of it.

Mr. Nicholas Winterton: On a point of order, Mr. Speaker. Is it appropriate for a Member of this House—I refer to the hon. Member for West Stirlingshire (Mr. Canavan)—to describe the Prime Minister as a criminal?

Mr. Speaker: Order. I thought that the whole House had taken the attitude of the right hon. Gentleman the Home Secretary, but it is entirely out of order to refer to any right hon. or hon. Member as a criminal. The hon. Member may now care to withdraw the remark.

Mr. Canavan: I did not refer directly to the Prime Minister. I did not name the Prime Minister, who is the head of a criminal Government, but if it is your wish—

Mr. Speaker: Order. That, the House will understand, is an apology.

Mr. Donald Stewart: Will the Home Secretary take some time today to deal, as a matter of urgency, with the

Foreign Office over the German trawlers which have been fishing in the Minch with the full backing of the German Government in areas designated by Britain as the subject of a herring ban? Will he, as a start, call off all negotiations for a common fisheries policy and revert to a right of 200 miles, which we would have enjoyed had we not gone into the Common Market?

Mr. Whitelaw: I must take very seriously what the right hon. Gentleman says about a matter which greatly affects his constituents. I shall refer the matter to my right hon. Friend the Foreign Secretary.

Mr. James Hamilton: Will the right hon. Gentleman, in the interests of the unemployed and people in receipt of social security benefits, now get off the backs of the civil servants, carry out the Government's election pledge on free collective bargaining, get the civil servants back to work and, on that basis at least, partially assist those who are unemployed and suffering hardship?

Mr. Whitelaw: As the hon. Gentleman knows, there have been discussions on this matter. The Civil Service unions are putting this matter to their members, and I have nothing further to add at this stage.

Mr. Chapman: asked the Prime Minister if she will list her official engagements for Thursday 21 July.

Mr. Whitelaw: I have been asked to reply.
I refer my hon. Friend to the reply which I have just given.

Mr. Chapman: Will my right hon. Friend draw the Prime Minister's attention to the recent extraordinary remarks from certain leaders of the Labour Party in London in their vicious verbal assaults on the Metropolitan Police force? Will he be assured that the overwhelming majority of Londoners support the Metropolitan Police in their difficult and sometimes dangerous duties? Does my right hon. Friend further agree that the recent assertion of the leader of the GLC that the police force is prone to violence is not only ill-founded but ill-timed, since nearly 400 policemen were injured in the recent outbreaks of civil disorder?

Mr. Whitelaw: I am grateful to my hon. Friend for what he has said about the support for the Metropolitan Police, which I believe is very strong throughout London. I recognise many of the strong feelings that have been expressed recently. I have no wish to add to them, but I am bound to say that, with all the responsibilities that I have had to carry on behalf of this House and the country, I deeply resented the way in which the leader of the GLC decided to make the remarks which he did.

Mr. James A. Dunn: Will the right hon. Gentleman ask his right hon. Friend the Prime Minister when she intends to fulfil her promise to request Lord Scarman to inquire into the disturbances at Liverpool and to report his recommendations to the House?

Mr. Whitelaw: I think that the hon. Gentleman appreciates that Lord Scarman's inquiry into what happened at Brixton has been somewhat broadened. He is pursuing these inquiries. I do not wish to comment further on what Lord Scarman is seeking to do, but I have every confidence that his report will be of great value to the House and to the country.

Mr. Beaumont-Dark: Has my right hon. Friend had a chance to note that the university Grants Committee has


cut the grant to the university of Aston, the second biggest in the country? Is he aware that the University of Aston does more for technological education—which this country needs—than any university in the country? Will he bring pressure to bear to see that this stupidity is reversed?

Mr. Whitelaw: I appreciate my hon. Friend's special knowledge of the West Midlands and of Aston university, and I shall bring his important remarks to the attention of my right hon. and learned Friend the Secretary of State for Education and Science.

Mr. Roy Hughes: Now that the ambulance service pay claim has been settled in line with the Government's pay norm, will the right hon. Gentleman say what further consideration the Government are giving to classifying this service as an emergency service with pay and conditions equal to those that apply to the police service?

Mr. Whitelaw: I note what apparently has been agreed, and, if that is so, I shall be very gratified. As for the contribution of the ambulance service in difficult circumstances, I hope that this House and the country will recognise what the service has done during the recent emergency, and, indeed, at all times, for the safety of our people.

Mr. Best: Will my right hon. Friend draw to the Prime Minister's attention the utter lunacy of the motions submitted to the next Labour Party conference? Is he aware that 100—[Interruption.]

Mr. Speaker: Order. The right hon. Gentleman and the Prime Minister can answer only for matters for which the Prime Minister is responsible. I gather that the right hon. Lady does not claim responsibility for those motions.

Mr. Best: Does my right hon. Friend agree that it is not the wish of either side of the House that motions should

go forward suggesting that there should be unilateral nuclear disarmament on the part of this country, that the troops should be withdrawn from Northern Ireland, and that the banks and insurance companies should be nationalised? Does he agree that that does not represent the views even of the majority of Opposition Members?

Mr. Whitelaw: The fact that my hon. Friend and I might regard some of those motions as pretty loony does not mean that I have to take any responsibility for them.

Mr. Winnick: In view of the latest tragic and shameful unemployment figures, was not the Minister of Agriculture, Fisheries and Food right last Friday in his television interview to dissociate himself from the Cabinet's economic policies? If the Minister of Agriculture has dissociated himself, why do not other Cabinet Ministers—who disagree so strongly with the right hon. Lady's disastrous policies—have the courage to do so?

Mr. Whitelaw: My right hon. Friend the Minister of Agriculture, Fisheries and Food is always wise, and he did not dissociate himself from Government policy.

Mr. McQuarrie: During the visit of my right hon. Friend the Prime Minister to Ottawa, will she be discussing with Prime Minister Trudeau the British North America Act and his proposals for that Act? If so, when she returns to this country, will she make a statement to the House on the discussions that she has had with him on that matter?

Mr. Whitelaw: I understand that on her return my right hon. Friend the Prime Minister will make a statement to the House on her discussions in Ottawa. At this stage, I cannot say whether that will include the matter to which my hon. Friend refers.

NEW MEMBER

The following Member took and subscribed the Oath:

Eric Douglas Harvey Hoyle Esq., for Warrington.

BUSINESS OF THE HOUSE

Ordered,
That, at this day's sitting, notwithstanding the provisions of Standing Order No. 3 (Exempted business) and Standing Order No.18 (Business of Supply), if proceedings on the Motions relating to Local Government (Scotland) have not been disposed of by Ten o'clock, Mr. Speaker shall thereupon put forthwith any Question already proposed, and shall then put forthwith the Questions necessary to dispose of the remaining Motions.—[Mr. Boscawen.]

British Broadcasting Corporation (External Services)

Mr. Greville Janner: I beg to move,
That leave be given to bring in a Bill to establish a Royal Commission on the British Broadcasting Corporation's external services; and for connected purposes.
The proposed Bill is of great importance to the House and to the country. It concerns the BBC external services. It has the support of right hon. and hon. Members on both sides of the House, and we are to be given no other opportunity, prior to the recess, to consider the disgraceful reduction in the strength and power of this country's voice through the BBC external and transcription services.
The Bill seeks to establish a Royal Commission on the British Broadcasting Corporation's external services. The Bill is in this form because no private Member may introduce a money Bill under the Ten Minutes Rule. Therefore, the Bill seeks to protect the BBC, through the establishment of a Royal Commission, against the cuts which have been introduced by the Government and which would be totally contrary to the wishes of the House were it able to express them.
The cuts, against which the Bill will provide a clear protest, are first in the transcription service, which provides 785 hours of programmes every year. It has substantial audiences in 100 countries. It includes amongst its services a Caribbean service frequently used by the Government Minister concerned so that his voice as well as that of the country may be heard in that area.
Second, the Brazilian service, amounting to 15¾ hours a week, is to go. The French service to Europe is to go. It has been built up since 1939 into a clear expression of accepted, objective reporting of news and the provision of comment for people who are unable to obtain it and understand it in English. The world service is, of course, restricted to those listeners who are educated enough to understand our language.
The Spanish service to Europe of seven hours a week is to go. The Italian service of seven hours a week is to go. The Maltese service of 35 minutes a week is to go. The Burmese service of seven hours a week is to go. With the Somali ambassador protesting vigorously, the Somali service, which amounts to only 5¼ hours a week, is to go.
The purpose of the Bill is to enable the will of this House to be heard so that we can, together, protest against an arrangement which will, if carried through, put us into the same broadcasting league as Albania and Egypt. Every service which disappears will be replaced by services most willingly provided by the USSR and others only too ready to recognise that broadcasting provides the most cost-effective and successful way of letting the voice of any country be heard abroad.
Unfortunately, we have financial problems which prevent our foreign service from operating as the Ministers no doubt want them to operate. I should have hoped that the Foreign Office and those who represent it, and who are at the moment consulting on the Front Bench, would welcome the Bill. It would strengthen their hand in getting the resources which a first-class Foreign Office would want for its services. I hope that they will see the matter in that light.
Certainly the Bill is necessary because the Leader of the House has said "Yes, we would like to have a debate but

there will be no time for it." It is necessary because over 160 hon. Members of all parties have signed a motion calling for the cuts to be revoked. It is necessary because it is clear that there will be no other way in which the will of the House can be expressed.
All of us in the House would echo the words of Sir Ian Jacob, a former director-general of the BBC. He said:
The BBC started these broadcasts in foreign languages at the request of the Government and their purpose was to state the truth with as much exactitude and sincerity as it is given to human beings to achieve; to elucidate objectively the world situation and the thoughts and actions of this country; and to build a closer understanding between peoples by providing interest, information and entertainment each in due measure according to the needs of the many audiences.
It is no answer for the Government to say "We are taking those cuts in the capital programme which have been postponed from previous years and putting them into this one, so we must cut the other services." That is a bogus argument. It is no answer to say that in future years more will be spent. We do not know what promises may again be broken, and the BBC has had to suffer from too many shattered promises in the past.
The Select Committee on Foreign Affairs, an all-party Committee, reported this morning. It protested in a footnote at the fact that the proposed cuts were not placed before the Committee when it discussed the BBC's external services. The protest is clear and all-party. Paragraph 28 of the report states:
Whilst the role of Great Britain in world affairs has changed a good deal in the last 25 years, we possess two valuable assets whose significance has, if anything, increased rather than decreased over that period, namely: we are the home of the English language and have a broadcasting organisation, the BBC, which is universally admired and respected throughout the world. We feel that these advantages may not yet have been sufficiently used or understood by previous governments. Members of the House expressed their views on these matters in a debate on 13 November 1979 when the Minister recommended acceptance of a Motion that there should be no cuts to the External Services of the BBC.
I would welcome opposition to the Bill so that the House might have the opportunity to vote on it. I invite the Government to put up an hon. Member to oppose it so that it can be shown that a tiny group of Government supporters, roped in by their Whips, support the Government's cuts. I invite the House, however, to vote in favour of the Bill massively, or, if I am given unopposed leave to introduce the Bill, to treat that as an indication of the united will of the House to proclaim to the world that we salute the BBC for the job that it is doing and that we wish it to continue that job with our full support and with the money that it needs.

The Chairman: I understand that the hon. Member for Newham, North-West (Mr. Lewis) wishes to oppose the motion.

Mr. Arthur Lewis: May I first intimate to my hon. and learned Friend the Member for Leicester, West (Mr. Janner) that I am not speaking on behalf of the Government or the Government Whips? They have not asked me to speak. I do so because I happened to hear my hon. and learned Friend on the overseas programme. There is a rule that an hon. Member should declare his interest. On this question, I wish hon. Members would declare interests and that they would admit that the BBC and its overseas services waste the taxpayers' money.

Mr. Barry Sheerman: Rubbish!

Mr. Lewis: My hon. Friend may say "Rubbish". I shall give proof.
On the overseas programme that I listen to consistently when there are all-night sittings in the House, rather than sit in the House, I hear such drivel as "Charades" and "The Word Game". The hon. Member for Isle of Ely (Mr. Freud)—I think that he is one of the sponsors of the proposed Bill—takes part in that programme, and he is paid very well for it. I know that a small group of hon. Members regularly contribute. Not only do they get good fees for doing so, but some of them also get cars. Because they do not drive Datsuns, taxpayers' cars are supplied by Leyland. Then they take part in these programmes, religiously and regularly. Of course, they are all in favour of an incomes policy, but not for themselves, and then they come here and shed crocodile tears about what the BBC is doing. Does my hon. and learned Friend know that only last week the chairman of the BBC went on a flip to New York? He could have gone on an ordinary flight, but not he. He had to take two seats on Concorde.
I like hon. Members to declare their interests. Are they really interested in this motion? Some of the programmes that I listen to are a lot of drivel. I listen to them only because it is better drivel than the drivel that I have to listen to here.
On another occasion, which is so farcical that it is unbelievable, the BBC spent £64—it may not seem a lot, but one must realise that the sick, the disabled, old-age pensioners and the rest have to pay their licence fees—to send a taxi from London to Newcastle to pick up four spiders for a television programme. The BBC's men could have gone to the street corner and picked up the first kid that they saw. He would have given them all the spiders they wanted.
There is a gross waste of money in the BBC. The regular contributors to "Any Questions", who get £300 or £400 and are all in favour of an incomes policy—

Mr. Cyril Smith: How much did the hon. Gentleman say?

Mr. Lewis: They get £300 or £400, which they never reveal, and of course a big fat dinner as well. Let us have some honesty. Let us admit that there is a need for a cut in some of the services, when there is waste and when money is being spent unnecessarily. There are two sides to every question. We should be assured that when any organisation—whether it is the Labour Party, the Tory Party or what I understand is known as the SDF—wastes the taxpayers' money, that will be manifested.
We must not forget that the taxpayers include the sick, disabled and people with no limbs. Every time they buy a packet of cigarettes, for example, they pay tax, which goes towards giving certain people a good additional income that none of them thinks of declaring.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business), and agreed to.

Bill ordered to be brought in by Mr. Greville Janner, Mr. Julian Critchley, Mr. Frank Field, Mr. Clement Freud, Mr. David Ginsburg, Sir Anthony Kershaw, Mr. Kenneth Lewis, Mr. Edward Lyons, Sir Brandon Rhys Williams, Mr. Barry Sheerman and Mr. Clive Solely.

BRITISH BROADCASTING CORPORATION (EXTERNAL SERVICES)

Mr. Greville Janner accordingly presented a Bill to establish a Royal Commission on the British Broadcasting Corporation's external services; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 195.]

Orders of the Day — SUPPLY

[28TH ALLOTTED DAY]—considered

Orders of the Day — Rate Support Grant (Scotland)

Mr. Dennis Canavan: On a point of order, Mr. Speaker. There is a matter of what I believe "Erskine May" calls " a direct pecuniary interest". The second motion on today's Order Paper refers to Stirling district, part of which falls within my constituency. If the motion is passed, the Secretary of State for Scotland will have the power to cut Stirling district's budget by up to £1 million, which will mean a savage reduction in the essential services of thousands of my constituents.
Paradoxically—or otherwise—one of the biggest beneficiaries may well be the Secretary of State, because he and his family are among the biggest property owners in Stirling district and they may well hope for a substantial rate rebate as a result of the proposal. Is it in order for the Secretary of State personally to move—and to vote on—such a motion? Should he not at least declare his interest before doing so?

Mr. Speaker: I am quite sure that every right hon. and hon. Member with a direct pecuniary interest in anything that comes before the House—except at Question Time—would be likely to declare his interest. However, that matter is not for me but for the person concerned.

The Secretary of State for Scotland (Mr. George Younger): I beg to move,
That the Report on the Rate Support Grant Reduction (Lothian Region) 1981–82, a copy of which was laid before this House on 10th July, be approved.

Mr. Speaker: I suggest that it would be for the convenience of the House to consider at the same time the two following motions—
That the Report on the Rate Support Grant Reduction (Dundee and Stirling Districts) 1981–82, a copy of which was laid before this House on l0th July, in respect of Dundee District, be approved.
That the Report on the Rate Support Grant Reduction (Dundee and Stirling Districts) 1981–82, a copy of which was laid before this House on 10th July, in respect of Stirling District, be approved.

Mr. Younger: With reference to what the hon. Member for West Stirlingshire (Mr. Canavan) said, I am certainly glad to confirm that I am a ratepayer of Stirling district, and I am excited to hear that I am one of the largest landowners in his constituency. That is news to me, but if the hon. Gentleman will get in touch with my lawyers they will be very glad to hear about it. It is extremely encouraging. All Members of the House are ratepayers in one way or another, so I suppose they could all declare an interest before a rate support grant debate. I note that, in spite of what the hon. Member for West Stirlingshire said, he did not actually declare his own interest as a ratepayer in the same district.
In any event, I am glad that we have the opportunity to debate at full length today the proposals that are before the House and which will be voted on at 10 o'clock

tonight. They have attracted a great deal of attention and prior comment, much of it misconceived. I welcome the opportunity of explaining to the House the nature and purpose of my proposals and the background to them.
There are two parts to the case I have to present today. First, I have to explain why it is necessary to have any such measures to control local government spending. Secondly, I have to give the detailed case as to why each of the authorities covered by these orders is clearly proposing expenditure which is excessive and unreasonable.
There is nothing new about Governments of both parties acting to reduce grant to local authorities in order to keep local spending at levels the nation can afford. It has always been so, and both local authorities and the Government have accepted this system even when, frequently, they have been in disagreement about economic and other policies.
When the Government assumed office in 1979, we found local authority expenditure and manpower at a very high level and on a rising trend. For each year of their last period of office, the Labour Administration increased the relevant expenditure figure assumed in the RSG settlement. In 1978–79 actual expenditure by authorities showed an increase of 5·2 per cent. over the level of the previous year. That was a substantial increase by any count, historical or otherwise.
It is quite clear from the public record that Ministers of the previous Administration were concerned about that situation. In moving the order relating to rate support grant for 1977–78, the right hon. Member for Glasgow, Craigton (Mr. Millan) said:
the February 1976 White Paper on public expenditure stated that the substantial rate of expansion in recent years in local authority manpower and in local spending could not continue".
He went on to describe the RSG settlement for that year as a tough one and said that he accepted that it would mean that hard decisions would have to be taken by local authorities about their services. On the increase in manpower, the right hon. Gentleman said:
I repeat the point which I have made on numerous occasions, that although I do not exclude the possibility of redundancy altogether—I accept that it may be necessary in certain areas in particular circumstances—I believe that the bulk of the problem can be dealt with by the use of recruitment policies, by natural wastage and, in some cases, by early retirement."—[Official Report, 22 December 1976; Vol. 923, c. 850, 858.]
It is particularly relevant to our proceedings today that in 1978 the right hon. Member for Craigton urged all local authorities, including Lothian regional council, to exercise moderation in their expenditure.
From what the right hon. Gentleman said, one might think that expenditure at that time was very much below what it is now, and, indeed, that would be right. At that time, Lothian regional council's expenditure was, at constant prices and allowing for inflation, £58 million less than the level which the right hon. Gentleman today appears to defend as the level which he thinks ought to be allowed to go ahead. I hope very much that later in the debate, if he does nothing else, he will explain the reasons for his remarkable change of view and why he appears to be going through one of the larger U-turns of his political career.
The Government rapidly concluded that substantial and progressive reductions in public expenditure were essential to economic recovery. Within two months of assuming office, I advised all local authorities that they would have to play their part just as every individual and


business would. Since then, I have consistently urged them, by circular and though my regular meetings with the Convention of Scottish Local Authorities, to exercise moderation in expenditure and in starting levels, in the national economic interest and in the interests of their own ratepayers.
My purpose has been throughout to afford all authorities the opportunity to plan levels of expenditure consistent with national economic requirements, without the need for any form of intervention on my part. But I am bound to say that, looking at the overall results for both 1979–80 and 1980–81, together with budget estimates for 1981–82, the response of many authorities has been disappointing.
In 1979–80, relevant expenditure excluding loan charges was 1 per cent. above the provision made by the Labour Administration in the rate support grant settlement for the year. For 1980–81, the provisional outturn of relevant expenditure appears to be some 4·9 per cent. above the rate support grant settlement for that year. The excess is of the same order disclosed by budgets for the year, and is a matter of great concern. Of even greater concern is the fact that budget estimates for 1981–82 reveal that, in total, authorities are planning to spend £180 million above the rate support grant settlement assumption. That is 8·8 per cent.—a high figure by past standards.

Mr. Donald Stewart: Has any check been made to separate the functions and services that were foisted on to local authorities by statute by different Governments? If the services are reduced in accordance with the cuts, will the right hon. Gentleman make clear that the deterioration in the services is entirely the Government's responsibility?

Mr. Younger: The right hon. Gentleman has a point, but it is comparatively small. Well over 80 per cent. of the expenditure involved is expenditure that is ongoing over the years and is not affected. Much of the extra expenditure, such as it is, that local authorities have been asked to undertake has been fully grant-aided—in some cases, almost completely so. The right hon. Gentleman's point does not go anywhere near remotely explaining the huge excesses which we are talking of here.
Those total figures do not convey the whole picture. It is perfectly correct that many authorities are planning for expenditure in some measure above the levels commended by the Government, but what is far more significant is that a high proportion of the excess is attributable to a small number of authorities which are proposing expenditure levels quite out of line with the Government's advice.
Quite apart from the damage that they are inflicting on the national economy, the progressive increases in expenditure planned by these authorities have imposed intolerable burdens on the ratepayers. I have some examples of the effects on ratepayers of the increases in rates imposed by Lothian region. A large department store—one of many—in Edinburgh has written to say that its rates have gone up from £181,000 in 1980–81 to £258,000 in 1981–82—an increase of £77,000. That store has pointed out the serious consequences for the employment of its staff, who are likely to suffer as a result.
An electronics firm in Sighthill makes the same point about an increase of £7,000. That is a small firm, for which it is a serious matter.

Mr. Robert Hughes: Is the right hon. Gentleman aware of the survey carried out by the Manchester chamber of commerce which showed that the rate burden on its members in Manchester varied from 0·7 per cent. to a maximum of 2 per cent.? Will he put in perspective what is happening in Lothian?

Mr. Younger: I study the situation in Manchester as closely as I study that in Edinburgh. The Manchester chamber of commerce has one great advantage over all of us: it does not operate in any of the areas suffering from the high rate increases that are covered by the motions. If the hon. Gentleman is maintaining that an increase of £77,000 in the rate burden for one department store is negligible, few people, including those on the staff of that store, would agree with him.

Mr. Robert Hughes: I want the Secretary of State to quantify the figure in terms of the costs of the business. Surely he cannot argue against the proposition that if the costs—the rates, as opposed to the costs of the business—range from 0·7 per cent. to 2 per cent. the increases are putting an intolerable burden on industry and commerce in the areas concerned.

Mr. Younger: I shall, of course, look with interest at what figures I can find about Manchester chamber of commerce.
The point that we must come back to, and which is every bit as relevant to the hon. Member for Aberdeen, North (Mr. Hughes) as it is to me, is that if such a department store has a £77,000 increase in its bill, it will have to add that much extra to make its profits. I can give the hon. Gentleman more evidence which, I think, may bring him over to my side in this argument.
The examples that I have given are only two of many representations from industry and commerce and, of course, from many domestic ratepayers who have written to say how severely affected they are. For example, the rates bill on a modest residence in Linlithgow has increased from £291 in 1979–80 to £613 in 1981–82—a savage 110 per cent. increase in only two years. It is hardly surprising that I have received an immense number of representations. From the domestic sector one petition alone carried more than 32,000 signatures, and other petitions and individual letters bring the total to more than 40,000.
If further evidence were needed—I doubt whether it is—I shall quote the telegram that I have received today from the Edinburgh chamber of commerce. [Laughter.] That laughter is an interesting measure of the priority that Opposition Members give to jobs. The Edinburgh chamber of commerce, its members and employees will note that its telegram was greeted by laughter from the Labour Benches. The telegram reads:
The Edinburgh chamber of commerce sends its full support to you in tomorrow's debate on the Lothian rates question. The latest findings from our continued monitoring of members' opinion show clearly that a major reduction in this year's rates bill is crucial to the survival of many businesses in Lothian. Further, the prospect for 1982, if economies in spending are not insisted upon now, is dismal. Certainly, decisions will be taken to move the centre of operations of a number of region-based businesses to outwith Lothian. Already eleven companies have taken this decision.

Mr. Canavan: Name them.

Mr. Younger: The quotation continues:
Private industry has already had to make dramatic savings by cutting back on employment to pay the rates bill and accepts that the range and level of services will have to be reduced to bring spending within the bounds of the ratepayers' capacity to pay. We regret that this could result in a loss of jobs in the public sector. This gives us no pleasure but is essential to maintaining in these difficult times, the current—albeit low—level of employment in the private sector. Business must be left money to stay alive and to provide the finance to ensure that essential services remain available to the community as a whole and the old, disabled and disadvantaged in particular.
That came from a highly responsible body, which is responsible for a large number of jobs in the Lothian region. Anyone who laughs or sniggers at that evidence is flying in the face of his constituents' interests, if his constituency is in that area. I hope that we shall hear no more of such attitudes.

Mr. John Home Robertson: Will the Secretary of State accept that it is appropriate that it is he to whom all those people have made representations about the level of their rates, because the overwhelming majority of rates increases in Lothian region and everywhere else in Scotland are directly attributable to the cuts in rate support grant that he has made?

Mr. Younger: Representations have not been made to me alone. Representations have poured in to Lothian region, as I am sure the hon. Gentleman knows.

Mr. Robin F. Cook: As the Secretary of State is regaling the House with the representations that he has received about Lothian region, perhaps he would like to draw to the attention of the House the statement that he received from the Edinburgh council of social service. That was not sent by telegram at the ratepayers' expense, as was that which we have just heard, but is in a letter signed by 43 representatives of voluntary organisations in Lothian region, such as the Edinburgh, Leith old people's welfare council, the Calton welfare service and the Edinburgh council for social service. That letter opposes the right hon. Gentleman's attempt to cut the rate support grant without due consideration of the consequences for the provision of services to those most in need.

Mr. Younger: Of course I pay attention to any such views, but I am bound to add what the hon. Member for Edinburgh, Central (Mr. Cook) has not added. We were specifically told by that organisation that those representations were the views of the individuals concerned, not those of the organisation itself. That considerably weakens the hon. Gentleman's case. As the hon. Gentleman has raised the matter, I may add that the telegram is representative of the views of the organisation, and was properly sent as such. It is signed by the president, no less.
It was in response to an avalanche of cries for help from ratepayers such as those, as well as to the danger to the national economic interest, that I was forced to turn to the powers available to me to act against spending which was excessive and unreasonable. Such powers already existed. They were originally brought in in 1929, and were confirmed by a Labour Government of which the right hon. Member for Craigton was a member, in 1966.I could have used them as they stood, but they had one great defect. They could be used only in retrospect after the end

of a financial year. They represented, therefore, a penalty rather than a cure for the disease of overspending, and they offered no help to the ratepayers who are the unfortunate victims of the whole situation. I therefore asked Parliament to allow me to use those powers at the beginning of the financial year, and Parliament recently granted that change.

Dr. J. Dickson Mabon: The right hon. Gentleman referred to the retrospective nature of the provisions in the 1966 Act. However, the rate support grant settlement in former years was a genuine settlement. No genuine rate support grant settlement has been made between the present Government and local authorities. It is unjust for the right hon. Gentleman to cite levels such as 1 per cent., 4 per cent. and 7 per cent. when there is no genuine settlement.

Mr. Younger: I am glad to hear from the right hon. Gentleman, who I believe was the Minister responsible at the Scottish Office at that time. The powers must have been brought to his attention, and he must have given his approval to such powers to act against local authorities whose expenditure was excessive and unreasonable. I therefore hope that the right hon. Gentleman will at least appreciate the reasons why we have been forced to use the powers that he himself once approved.
With regard to the differences in rate support grant settlements, we were living in very different times in 1966. We had not yet experienced all the years of waste and improvidence under various Labour Governments. We had enjoyed a long and prosperous period of Conservative Government between 1951 and 1964, and it was possible to spend much that we could not even think of spending now.
That change was approved by Parliament recently, and we now have it on the statute book. I stress that no new principle is involved in using it. My purpose was simply to ensure that action could be taken through reduction in the rate support grant at an earlier and more effective stage. The new provisions retained the safeguards in the earlier provisions, notably the requirement to obtain the approval of the House for any proposal to reduce the grant, and that is being carried out faithfully.
Before turning to the detail of the reports, there is one further general point which I should stress. It has been suggested from time to time that my action in these three cases has been precipitate. That is quite untrue. I have already reminded the House of the prolonged efforts that I made, before seeking new powers, to persuade all authorities to moderate their expenditure. I not only made it clear that I would have to take action if they failed to do so, but I went out of my way to help them, to compromise, and to make a difficult task easier for them.

Mr. Robert Hughes: The right hon. Gentleman is joking.

Mr. Younger: For example, in 1980 I did not make a general abatement of the rate support grant in Scotland when there was one elsewhere, because COSLA assured me I could trust the local authorities to make reductions. Those, in fact, never materialised, so that a retrospective abatement will have to be made. Yet again in 1981 I contained the reduction in relevant expenditure to 2·7 per cent. in Scotland by making some extra savings in my Department purely in order to help local authorities.
Those are attitudes of co-operation—not confrontation—but they have resulted in not one glimmer of a response in the formal representations I have received from these three authorities. Even this very order has been reduced for all three authorities from the original sums which I proposed—[HON. MEMBERS: "Why?"]—mainly because of my desire, even now, to show flexibility and reasonableness. A case for confrontation or unreasonableness simply will not begin to hold water, and Opposition Members had better get that straight.
I now come to the events leading up to these reports. During the proceedings on the new powers, I advised authorities that I would not take action if they moderated their expenditure but would feel obliged to do so if they failed. Along with certain other authorities the three authorities which are the subject of these reports were given preliminary notice on 3 June that their budget estimates revealed a level of planned expenditure which prima facie I had to regard as excessive and unreasonable and that I proposed to initiate action under the new measures, when enacted, unless they could offer material savings. That was repeated in the formal notifications issued on 11 June, the day of Royal Assent.
The representations submitted by all the authorities were subject to careful consideration before my decisions were conveyed to the authorities. When my decision was conveyed to them, it was made clear that I would still, even at this very late stage, be prepared to receive and consider any further representations before implementing the grant reductions, if approved by the House, and that I would allow a short period after approval for that purpose. Two of the authorities, Dundee and Stirling, have already had preliminary meetings with my hon. Friend the Under-Secretary of State during the past few days. The offer remains open to the third authority, Lothian regional council.
The right hon. Member for Craigton asked me at Question Time last week whether I was prepared to receive further representations and proposals before implementing the grant reductions set out in the reports and whether I was prepared to defer action for that purpose. I am happy to assure him that, consistent with the reasonable line which I have adopted throughout, I should be prepared to do so, and I am glad to make the position again perfectly clear to the authorities concerned.
I turn now to the reports. The documents attached to these reports give all the details and the reasons for my proposals in each case, including the past background, the comparisons, and the criteria I have taken into account. I must again make it clear that I have not picked on one particular criterion—such as expenditure guidelines, for instance—and taken action against those who are a certain level over those. I was particularly asked by COSLA, incidentally, not to do that, and I have not. I have assessed each one over a whole range of criteria—past expenditure trends, expenditure per head, levels of rates, amount of rate rises, and so on, as well as its performance in relation to guidelines. There may, of course, be understandable reasons why some of those factors, for some authorities, should be out of line, and that is why the cases before us today are all very substantially out of line on a number of those criteria.
I can give some examples. Stirling district council shows a steady increase in expenditure from 1978–79.

Guidelines have been regularly exceeded, and cumulative growth from 1978–79 to planned expenditure for 1981–82 is no less than 28·7 per cent. in real terms. That contrasts sharply with the progressive reductions in spending levels which I have been urging authorities to make since immediately after the Government assumed office. Planned expenditure per head for Stirling district in 1981–82 is 5 per cent. above the average for all district councils and no less than 15 per cent. above the average for authorities which I consider closely comparable. The rate increase in 1981–82 is no less than 122 per cent. No reason can be found in recent population changes for the substantial growth in expenditure proposed by the council.
Dundee district council spent close to the guideline figure in 1978–79 and 1979–80, but both actual expenditure for 1980–81 and planned expenditure for 1981–82 are substantially above the guidelines. Cumulative growth from 1978–79 to 1981–82 was initially estimated at 21·7 per cent.—a figure that can be modified to 17 per cent. after account is taken of a technical point relating to the treatment of interest receipts raised by the council in its representation. Planned expenditure per head is £2 above the corresponding figure for closely comparable authorities. The rate increase in 1981–82 was no less than 150 per cent. The population of Dundee appears to be declining more rapidly than the national population, with an accelerated decline in the under-16 age group and the proportion aged over 65 being slightly higher than the national figure. I can find no reason in population change for the substantial growth in expenditure planned by the authority.
Lothian regional council showed by far the highest excess among regional councils over the guidelines for both 1980–81 and 1981–82. It is planning in 1981–82 for a level of expenditure, at constant prices, no less than £57·8 million—22·7 per cent.—above the level of spending in 1978–79, which itself exceeded by £1·5 million the guidelines issued by the Labour Administration of which the right hon. Gentleman was a member. The per capita figure for 1981–82 is no less than £93·5 more than the corresponding average figure for regional councils which I consider to be closely comparable, and £54 per head above the average for all regional councils. The rate level was increased by 49·3 per cent. in 1981–82, following an increase of 41·5 per cent. in 1980–81—an increase of nearly 100 per cent. over two years. Population change has been more or less in line with national trends.
I should deal finally with the points made by the authorities in the representations annexed to my reports. I can dispose very quickly of the more general points made by all three authorities. In particular, I reject the suggestion that my proposals constitute a threat to local democracy. [HON. MEMBERS: "Oh!"] It is very interesting to hear Labour Members saying that. The principle that the Government of the day have an undeniable interest in local authority expenditure levels has been established under successive Governments, and, as I said earlier, the right hon. Member for Craigton, when in office, also adopted measures—albeit of a different kind—to influence spending levels.
Local authorities remain free to determine their own priorities and ultimately to reach their own decisions. But neither the present Government nor the authorities' own ratepayers can afford to subsidise economic irresponsibility. It is particularly misleading to claim that a mandate can be found in the outcome of a regional council election


in 1978—in which only 43·9 per cent. of the electorate voted—for reckless expenditure levels in 1981–82, constituting a threat to the national and the local economies. Otherwise, the representations advanced by Lothian comprise a general defence of its policies and an account which I regard as highly misleading of the consequences of the proposed grant reduction.

Mr. Alex Eadie: rose—

Mr. Cook: rose—

Mr. Younger: I think that I had better press on.

Mr. Eadie: The right hon. Gentleman was discussing mandates and subsidising economic irresponsibility. Does he not agree that he is a member of a Government who are subsidising economic irresponsibility to the extent that there are 3 million unemployed? Why does he say that he can carry out his mandate—which is a very doubtful mandate in Scotland—while at the same time preventing the Lothian region from implementing its mandate?

Mr. Younger: The difference is that I do not suppose that anyone could have foreseen in 1978 the expenditure levels in 1981–82. If anyone had done so, the hon. Gentleman well knows that it would have been impossible to run any authority on the basis of such a mandate. As he knows, the rate levels that can be afforded have to be examined each year, and all authorities are doing so. My job is to try to answer the cries for help which I have received from the many thousands of ratepayers who—

Mr. John Maxton: rose—

Mr. Younger: —as I have spelt out in detail, are suffering because of this.
I draw the attention of the House in particular to the assumption that expenditure reductions will require to be made pro rata over all forms of expenditure, leading to substantial redundancies. There are two comments which have to be made about that. First, I have been warning for two years now that if the necessary reductions in spending plans are to be achieved without redundancies action has to be taken in good time. Those who delay until the last minute are themselves by this action making it difficult or even impossible to avoid some redundancies.
I understand that Strathclyde—[Interruption.] Other authorities have begun to reduce staff, and so far they have done so without any compulsory redundancies. For instance, in Strathclyde, which contains the constituency of the hon. Member for Glasgow, Cathcart (Mr. Maxton), the authority has reduced staff in the past year by more than 1,000 and expects to make further reductions this year of more than 2,000. Yet so far that has been done by natural wastage, and the council remains committed to the avoidance of redundancies. It had the good sense to start early, avoiding the need for last-minute crisis measures. Opposition Members should try to avoid being too alarmist.

Mr. Maxton: Will the right hon. Gentleman give way?

Mr. Younger: They should bear in mind that in 1976, when they called for expenditure cuts, local authority leaders forecast widespread redundancies, but numbers fell by no fewer than 11,000 by natural wastage, with no forced redundancies. That was the record of the Labour Government, whose members are now making such a song and dance about this matter.

Mr. Maxton: It really is time that the Secretary of State and his supporters got it clear that, just because there are no compulsory redundancies, if Strathclyde is to lose 3,000 jobs, that is still 3,000 youngsters or others in Strathclyde who will not obtain employment as a result of his actions.

Mr. Younger: That is always to be regretted whenever it happens. What the hon. Gentleman totally ignores is that there are thousands of others who have to meet the expenditure to pay those in the public sector. They have been losing their jobs for years while the public sector has grown fatter.
Secondly, it must be said that the scare stories about half the employees being sacked are absurd and cruel to those concerned.

Mr. George Foulkes: How many?

Mr. Younger: I suppose that it would be possible to devise schemes for reduction in spending which concentrated exclusively on staff cuts and thus ensured that the maximum number of redundancies took place—although I confess that that would not be my approach if I were a member of a local authority. This appears to be the way that some authorities are at least talking about doing the job. No doubt their objects are to cause maximum concern among their staff for their own political purposes and to conceal their own wastefulness in non-staff expenditure.

Mr. Peter Fraser: Does my right hon. Friend agree that more cruel than the numbers game that is being played by local authorities in terms of redundancies is the allegation that they are putting about that, if some of their employees do not share their political persuasion, they will be the first to go when redundancies are required?

Mr. Younger: I am grateful to my hon. Friend. I have not seen such suggestions, but if such activities are going on in any local authorities I am sure that they will be deplored by everyone. I notice that even the hon. Member for West Stirlingshire looks indignant about that, and I am sure that he will agree that any discrimination on political grounds would be absolutely intolerable. I hope that it will not be seen anywhere.

Mr. Norman Hogg: Will the right hon. Gentleman give way?

Mr. Younger: I think that, in the context of the alleged scare stories about redundancies, I should draw the attention of the House to the much more rational assessments which have been made by the various opposition groups on Lothian regional council, which indicate clearly that expenditure reductions amounting to between £18 million and £28 million could be made by prudent management, including controls on recruitment and staff replacement and substantial economies in non-staff expenditure.
The recklessness shown by Lothian regional council in building up staff numbers in recent years may well make some redundancies inevitable if its expenditure is to be brought to a tolerable level. I firmly reject the alarmist impression which the council has deliberately sought to create in its response.

Mr. Norman Hogg: rose—

Mr. Younger: Since my concern is with the total level of planned expenditure, I do not propose to comment in detail on the points raised by Lothian on individual programmes—

Mr. Robert Hughes: Why not?

Mr. Younger: —but I draw the attention of the House to the considerable body of evidence advanced by the council itself acknowledging unreservedly that it is planning for expenditure levels—notably in education, social work and transport—far beyond those commended by the Government and adopted by other regional councils.
Stirling and Dundee district councils also offer a general defence of their planned levels of expenditure. In addition, Dundee has pointed out that the manner in which it accounted for interest receipts in the original budget estimate artificially inflated by £431,000 the figure placed on planned expenditure for 1981–82. I was able to take this technical point into account in considering the amount of the grant reduction.
Most people will find it almost unbelievable that none of these authorities felt able to propose any expenditure reductions at all. I do not believe that any organisation of that size is so perfect that no savings could be found. Certainly no private business could work in such a way. After careful consideration—

Mr. Dennis Skinner: Will the Minister give way?

Mr. Younger: I should not give way, but I am tempted to do so.

Mr. Skinner: Is the Minister aware that many English local authorities have written to their Members of Parliament imploring them to support the Opposition's attempt to stop the motions being accepted, because they are concerned that this is the thin end of the wedge?
On the question of local authorities getting the figures right or wrong, is the right hon. Gentleman aware that he and his colleagues in the Cabinet should be the last people to talk about the need for local authorities to get then-projections correct, because he and his Cabinet friends got the public sector borrowing requirement wrong to the tune of £5,000 million—60 per cent. of the total? So who is he to talk about the local authorities getting their figures wrong?

Mr. Younger: I have not been complaining about local authorities getting their projections incorrect. I have been complaining about their planning to spend excessively and unreasonably above the levels. I am grateful for the intervention of the hon. Member for Bolsover (Mr. Skinner). His advice is always balanced and worth hearing. I am sure that he will take part in the debate later if he catches your eye, Mr. Deputy Speaker.
I have taken seriously and looked carefully at all the representations made by the three authorities, but after careful consideration I could see no reason to depart from my original view that planned expenditure in all three cases was excessive and unreasonable. Taking account of the points made by the councils, and having regard also to the fact that expenditure reductions will require to be made during only eight months of the financial year, I decided to moderate the amount of the reductions as

originally proposed to £47 million for Lothian regional council, £2 million for Dundee district council and £1 million for Stirling district council.
I assure the House that I shall continue to adopt a reasonable and constructive approach, given approval to the grant reductions that I now seek. They will not be applied automatically and immediately, and I hope that even at the eleventh hour the authorities concerned will feel able to advance proposals for substantial reductions in expenditure and will seriously consider taking advantage of the provision of the 1981 Act which will enable them, if they wish, to pay out a rates reduction to all their ratepayers.
Finally, may I say this to the House and to those who are involved with the local authorities affected by these orders. Of course, I fully understand that people in those authorities are devoted to the services that they provide and wish to improve them in any way they can. That is understandable and natural, but it is not unique. Many people besides themselves are equally keen to provide better services. It is what we all want to do. However, there is nothing clever about providing more and more services without thinking where the money comes from. Any fool could run a local authority, or, for that matter, a business, if they never gave a thought to how much they could afford but thought only about what they wanted to spend.
It will do no good to Stirling, Dundee or Lothian if they have the best services in the world and all their industries have been ruined by crippling rate increases or have moved elsewhere. Nor will it help their ratepayers to have the promise of better services if, at the same time, they face rate demands which they and their families literally cannot afford. These reports, and figures that I have quoted and published to back them up, make an overwhelming case that these three authorities are proposing to embark on greatly increased expenditure which is both excessive and unreasonable. I therefore ask the House to approve the reports later tonight.

Mr. Bruce Millan: We have listened to an appalling speech by the Secretary of State which came nowhere near matching the seriousness of the situation that we now face in local government in Scotland. What we are dealing with in these orders is not simply a local issue affecting Lothian, Stirling and Dundee. We are dealing with a crisis affecting central and local government relationships. We are also dealing with a specific situation in Scotland in which there may be—this is absolutely unprecedented, and is frightening in its implications—a breakdown of essential services in a few months' time in one of the major Scottish local authorities, which may have no money left to pay for education, social work, the police force and so on. That is the reality of the situation, yet we get no idea of its seriousness from listening to the Secretary of State's speech today.
The implications of what the Secretary of State is doing are there for every local authority in Scotland, England and Wales to see. England and Wales are promised—or threatened with—similar legislation next year. The fact that we are debating this matter on a day when unemployment in Scotland has reached 318,000—a post-war record—is ironic and tragic and puts into perspective the right hon. Gentleman's crocodile tears about


unemployment. He should be thoroughly ashamed of the figure, yet on this very day the Government produce proposals for local authorities which, if implemented, will add thousands to the dole queues in Scotland when they should be producing proposals to reduce unemployment, especially for school leavers. That is the reality of the reports.
It has never been denied that the Government must be interested in the totality of local authority expenditure. They have an interest in persuading local authorities to spend within what they consider to be reasonable limits. However, local authorities are democratically elected, and in Scotland they have a far firmer mandate on the wishes of the Scottish people than have the Government. They, too, have a responsibility.
The Secretary of State and the Government have always had substantial powers. The Secretary of State has the power of persuasion, which is the first power that should be used. It is also one of the most powerful if properly used. He also has power through the financial pressure of the rate support grant, which he can cut, so that local authorities are then faced with pressure on the rates and pressure from the electorate. Although the Government and local authorities may have somewhat different interests, to put it at its lowest, the Government have always been able to exert considerable pressure on local authorities to come reasonably near to conforming with their wishes.
However, it has always also been recognised that, although the Government have the right to determine their contribution to local finances, local government has, at the end of the day, the right to determine its level of services and contribution. Indeed, it has always expressed its role responsibly. It has a far better record in the control of expenditure than the Government both in Scotland and south of the border.
If the Government take away the right of local government to determine its expenditure, what role is left for it? Local government is about determining the services that meet the needs of local communities and how they should be paid for. If that right is taken away, local government is reduced to being simply an agent to carry out the wishes, demands and dictates of the Government—and that is what the Government are trying to do. They are trying to shackle local authorities. The debate is not only about the orders or the three local authorities concerned, or even about the other three authorities that may be involved in similar orders in a week or two. It concerns the rights of every democratically elected local authority in Britain.
The Secretary of State implied yet again today that we are dealing with a number of difficult local authorities; the rest are perfectly responsible. He used to go out of his way to say how responsible Strathclyde was, but that responsibility, for reasons which I shall explain, led to a rate increase last year of 37½ per cent. because of Government cuts in grant. However, he had always gone out of his way to say that Strathclyde and other Scottish regions were perfectly responsible and all that he was concerned about was a tiny handful of local authorities which were not playing the game according to the Government rules. That was the justification for the Local Government (Miscellaneous Provisions) (Scotland) Act, which is now on the statute book. It was to be discriminatory. It would avoid general punishment of all local authorities in Scotland. It would punish the few, and

everyone else would be all right and need not worry about the legislation. So long as local authorities played the game according to the Government rules, there would be no danger. Indeed, the Act was a positive advantage because by the others being penalised the local authorities would escape any penalties.
The reality is entirely different, and in a moment I shall explain why. First, I shall repeat in the most explicit terms what I have already said. COSLA, as well as the Labour Opposition, was completely opposed to the Act. The next Labour Government will repeal these provisions of the Act. Let there be no doubt about that.
The Act gives the Secretary of State an arbitrary power to determine what is reasonable expenditure at any local authority level. We said that it was arbitrary and unjust. We said that it would be implemented in an arbitrary and unjust way, and that is how it has turned out in the three reports that we are now debating.
However, the Government went beyond just deciding that there would be penalties on the so-called offending local authorities. The Government also decided that there would be no loopholes for the offending local authorities, and no provision, for example, for supplementary rates, which has never been a feature in Scotland as it has in England. They then added to the Bill—incidentally, something that was not in the original Bill; it was added on Report—a new power, introduced also without consultation with COSLA, whereby, when a local authority found itself in difficulties because of the penalties, it would not be able to borrow money to meet the expenditure.
Lastly, another new clause was introduced at a late stage. It was put in as a kind of political gesture. By it a local authority would be encouraged and coerced—this, clearly, was the intention of the Secretary of State—to pay money back to the ratepayers. That was put into the Bill for no legitimate reason but because the Government hoped that in some way they would get a political victory by forcing a local authority to pay money back to the ratepayers.
The original justification for the legislation has turned out to be false. We are not dealing with a few offending local authorities which are opposed to the Government guidelines. There are 65 local authorities in Scotland, 59 of which are above the guidelines, 41 more than 10 per cent. above, and 28 more than 20 per cent. above.
The Secretary of State has never told us why, when the complaint was about a few rogue authorities, we reached the stage at which 59 out of 65 are above—most of them well above—central Government guidelines. There is a simple explanation: the guidelines are artificial, and are becoming increasingly so. As each year goes by, the Secretary of State puts out figures which bear no relationship to reality. The total expenditure that he assumes for the purpose of rate support grant has nothing to do with what local authorities are now spending.
To make the situation worse, written into the rate support grants are inflation allowances which are completely inadequate to meet the burdens which local government, through no fault of its own, has to bear because of the general rate of inflation in the economy. As a result, the guidelines bear no relationship to reality.
That is bad enough, but what makes it even worse is that the grant is paid on the phoney figures, not on the figures that the local authorities are planning to spend. The Government say that they are maintaining roughly the


same level of grant, but the level of grant that they have paid local authorities in Scotland has already fallen significantly.
Indeed, COSLA reckons that, for 1980–81, while the ostensible rate of grant is 68·5 per cent., the real rate of grant is only 62·1 per cent. While in 1981–82 the Government pretend that the rate of grant is 66·7 per cent., in fact the total grant paid to Scottish local authorities for the year will be less than 60 per cent. The reason for the soaring rates in Scotland—more than 30 per cent. in two successive years, which puts a burden on the rate-payers—is the savage reductions in grants by the Government. That is where the main responsibility lies for the soaring rent increases in Scotland.
The other inevitable result of dealing with local authorities in Scotland in this dishonest way—that is what it is; the Government have dealt with local authorities with complete dishonesty over the past couple of years—is the soured relationship with local authorities. The Secretary of State is not getting the co-operation from Scottish local authorities that he might have got if he had dealt with them honestly and decently over the past couple of years. The silly, inane and prejudiced attacks by Conservative Members on Scottish local authorities over those years have done immense damage to central-local government relationships and, incidentally, have posed considerable problems for the Secretary of State.

Mr. Ian Lang: I thank the right hon. Gentleman for giving way. He talks about co-operation. If the case of Lothian region is as strong as he implies, does he not feel that it might be a good idea if it were to accept the invitation of the Secretary of State to talk to him on the matter?

Mr. Millan: I shall come to the Lothian region in a moment. First, I want to complete this part of my speech. We are dealing not with a few Scottish local authorities which are above the guidelines but with 59 out of 65. For that reason, the whole purpose of the Local Government Act has been shattered. As well as the penalties on the three or six local authorities, there will be a general clawback of local government expenditure.
The Secretary of State carefully avoided saying anything about that matter today, although he knows that it is a key issue with Scottish local authorities and although he has been asked repeatedly—he was asked in the Scottish Grand Committee on 23 June—to make his intentions clear, not just for the sake of the three authorities which we are debating today but for the sake of every Scottish local authority. He says that he wants a general reduction of £100 million and that he intends to get it one way or another. The reports that we are discussing today deal with £50 million. What about the other £50 million? Will it be taken in the general clawback? Why are we not given answers to these simple questions, and why are we not given honest answers? Even when we get answers they are rarely honest. However, on this occasion we have been given no answer. The Secretary of State is not telling us. No doubt he thinks it is clever to play his cards close to his chest, and that if local authorities do not know what is in store for them he will get some advantage from that. So what about the rest of the £100 million?
May I ask the Secretary of State another question? I assume that he knows the answers. If he wants to give

them now, I shall gladly sit down and allow him to do so. What happens if the penalty on Lothian region is reduced, say, by £10 million or £20 million? It has already been reduced by £6 million. Does that still go towards the £100 million that he intends to obtain? Will it be redistributed among the remaining local authorities in Scotland?

Mr. Younger: I have already explained that point to the right hon. Gentleman. I shall do so again. There are two ways by which we hope to recover the money. One is by selective reductions, which we are now discussing, and the other is by a revision of budgets that I have asked all local authorities to undertake. I have many qualities, but not clairvoyance. I do not know what the revision of budgets will produce. If it produces substantial reductions and there are also reductions from the selective basis, the amount that must be recovered may be altered. I cannot answer the right hon. Gentleman until I know what the reductions in the budgets will be.

Mr. Millan: The right hon. Gentleman has admitted that there will be a general clawback. I asked him a specific question. If the selective penalties are reduced, will the reduction be spread over all the other local authorities in Scotland, or will there be an overall reduction so that the £100 million is reached?

Mr. Younger: This is the fourth time that I have explained the point to the right hon. Gentleman. The overspend is £180 million. We must recover about £100 million. That is a generous figure. I am trying to achieve it by two different methods. We are debating one method today, and if the House agrees to it we shall get some of that money. The remainder must be achieved by a general revision of budgets. Once we know what that is, I shall consider whether the £100 million is necessary in total. I cannot operate through a crystal ball. I must wait to see what the reduction in budgets will be. I made that point clear to anyone who wished to listen.

Mr. Millan: What the Secretary of State has said is rubbish. He knows whether the £100 million is necessary. He knows whether he will, at the end of the day, get £100 million. As he has been so repeatedly evasive on the matter—no doubt the Minister will correct me when he replies if I am wrong—we must assume that if a penalty on Lothian, Dundee, Stirling or anywhere else is reduced, that amount will be redistributed in penalty through a general clawback to all other local authorities in Scotland. That is the only reasonable interpretation of what the Secretary of State said. If that is not the position, he has had every opportunity to say so. That is what will happen.
We are debating not three local authorities but every local authority in Scotland. If the right hon. Gentleman carries out his clear intention of redistributing the reduced penalties throughout every local authority in Scotland, there will be a perfectly justifiable explosion of anger among local authorities because they will have been deliberately misled by his arguments. As well as penalties for the few, there will be a massive clawback that will affect every local authority in Scotland.
The position is even worse than that because the right hon. Gentleman has already said, and confirmed this afternoon, that there will be an additional penalty next year—even before local authorities begin to budget for next year's expenditure—because of a clawback in 1980–81 of no less than £60 million. That will add 5p to


the rates of local authorities in Scotland before thay begin to budget. When we hear the usual artificial squeals of surprise and anger from Conservative Members about next year's rates burdens, I hope that they will remember—as will the Opposition—that much of the additional rates that inevitably will be imposed next year will result from the £60 million penalty carried forward from 1980–81 and from the deficits that will be carried forward for the current year. Against all the right hon. Gentleman's protestations, and against his word which he gave to local authorities earlier this year, there will be a massive clawback of all local authority expenditure in the current year.
We are getting the worst of all worlds. We are getting a penalty and a general clawback. The only difference between Lothian, Stirling and Dundee and the generality of local authorities in Scotland is that the first three are being put into an absolute straitjacket, with no opportunity to make any decisions about levels of expenditure, while the other authorities will at least be able to borrow and carry forward the deficit at the expense of the ratepayers in 1982–83.

Mr. Younger: There is one point that should be clarified before the right hon. Gentleman goes further. He has shown a great deal of indignation about the level of spending, the guidelines, and the level to which I am asking local authorities to reduce their expenditure. How does he explain that that level is higher in real terms than the figure that he approved as being a reasonable level of spending in 1977–78, when he was Secretary of State for Scotland?

Mr. Millan: I had not reached the question of guidelines. [HON. MEMBERS: "Answer the question."] I shall answer the Secretary of State. That will be different from what we get from him. He does not answer. As the Select Committee on Statutory Instruments pointed out in an interesting report, the guidelines have been given a mandatory significance by the Government which they were never intended to have. They were meant to be no more than guidelines. The Government are not using them in that way.
Apart from the three reports being dealt with today, what about all the other authorities that are above the guidelines—far more so than Lothian? Why is there not an order penalising Orkney, which is 40 per cent. above the guidelines? Why is not there one for Shetland, which is 72 per cent. above the guidelines? Of course, the Secretary of State would not dare to do anything to Shetland because our oil comes into Shetland. It is as simple as that. That is the honest answer to the question. We have asked those questions before. Why is there not an order for Shetland?

Mr. Younger: I do not wish to keep interrupting, but the right hon. Gentleman has invited me to answer. I took special trouble in my speech and devoted a considerable part of it to making it clear that we are not dealing with an assessment made on whether an authority is above the guidelines. I am sorry if the right hon. Gentleman was not listening. When he reads Hansard he will see that I explained clearly that that was not the criterion. That is why that was not taken into account.

Mr. Millan: That is another non-answer. The right hon. Gentleman is saying that the guidelines are meaningless. That is exactly what the Opposition say.

They are meaningless, whether we are referring to Orkney, Shetland, Ettrick and Lauderdale at 26 per cent. above the guidelines, Banff and Buchan at 38 per cent., Moray at 35 per cent., Caithness at 33 per cent. or anywhere else. When the right hon. Gentleman is Tackled on the guidelines, he says that they do not mean very much and that other things are not taken into account in the guidelines. If significant local factors are not taken into account, that confirms that the guidelines mean nothing. Yet the argument and the case for Lothian have been about the guidelines.
There are other general arguments, but I shall not go into them in detail—for example, the question of the local authorities with which the Secretary of State has compared the penalised local authorities. It has not been demonstrated that that was done in any sensible, rational or objective way. The use of rate poundages is one factor. In the districts rate poundages are affected mostly by housing, which is not a part of the exercise.
Many other general points have been made in the responses to the Secretary of State's provisional reports. Reading the responses made it clear to me, and to other hon. Members who took the trouble to read them, that the Scottish Office does not have the detailed knowledge of local circumstances to justify its undertaking the sort of exercise on which it is engaged with the three local authorities under discussion, or any other local authority in Scotland. It is an example of centralism gone mad.
The arguments are not dealt with in the reports, which simply state that the arguments are attached and that, having considered them, the Government are carrying on as before. The reports are a farce and a fraud. They are individually and collectively fraudulent. They do not deal with the issues. They do not answer the individual points raised—for example, that Lothian has demonstrated that of the 37p rate increase in the current year, only 11p arises from growth in services. When listening to Conservative Members one might think that all of the 37p resulted from a growth in services. Less than a third of it can be attributed to that.
The Secretary of State referred in a most laborious passage to the 15,000 redundancies in the Lothian response. The Lothian region believes those redundancies to be inevitable if the savings for which the right hon. Gentleman is asking are made in the current year. The right hon. Gentleman shakes his head. However, he came a long way this afternoon to admitting that there would be considerable redundancies. It was typical of him that he did not want to give a figure. He said that the actual number would be for the local authority to decide. The estimate of 15,000 has been prepared by the officials of the Lothian region. In the absence of a better figure, I am willing to accept that there will be 15,000 redundancies among Lothian region employees in the current year if the right hon. Gentleman implements his £47 million penalty.
It is clear that the cuts demanded by the Secretary of State cannot be made in the current year either for the three authorities that we are discussing or more generally without cutting essential services. Secondly, it is clear that the cuts are not economically justifiable given the present economic position in Scotland. Thirdly, if the cuts are implemented, they will add significantly to dole queues in Scotland. I repeat that 318,000 are unemployed in Scotland. There is another figure that the right hon. Gentleman studiously ignores or refuses to confirm, although he knows it to be true. He knows that his plans


for next year will lead to a reduction of no fewer than 6,000 teachers. That will be the reality, although he denied that that is so.
It must be crystal clear to the right hon. Gentleman that whatever happens there is no prospect of cuts of £100 million being made in expenditure in the current year. Whatever is the content of the revised budgets that he receives by the end of this month, he will not get £100 million worth of spending cuts in the current year. He must face that reality.
The Secretary of State knows that it is literally impossible to achieve a reduction of £47 million in the Lothian region in the current year. Why does he not admit that? Why does he come forward with the report and pretend that it can be implemented when he knows that it is impossible to achieve such a reduction?
The Lothian Tories have produced their own budget. It provides for cuts of only £26 million in the current year. Some of the figures are extremely dubious. The Tories charmingly tell us that their alternative proposals will lead to only 4,000 jobs being lost. A saving of only £26 million will lead to 4,000 job losses. Is the right hon. Gentleman happy about that? There are 318,000 unemployed in Scotland and it seems that he is happy about an additional 4,000 jobs being lost. Is he happy about that?

Mr. Michael Ancram: rose—

Mr. Millan: I am not interested in the chairman of the Scottish Tory Party and his sycophantic contributions to these debates. Let the Secretary of State answer. Does he care that even on the basis of the Tory group's proposals there will be 4,000 jobs lost in the Lothian region in the current year? Does he care or does he not?

Mr. Younger: Does the right hon. Gentleman care that far more than 4,000 jobs have already been lost in the Lothian region because of rate increases that businesses cannot afford?

Mr. Millan: That is nonsense. The right hon. Gentleman should be careful when talking about caring when there are 318,000 unemployed and when we have the most uncaring Government that we have had since the war. Apart from a loss of 4,000 jobs, the Tory proposals mean fare increases, the slashing of concessionary fares and an increase in the price of school meals.

Mr. Allan Stewart: rose—

Mr. Millan: The proposals were designed to produce a saving of only £26 million. The right hon. Gentleman knows that he cannot achieve savings amounting to £47 million in the current year, but we still have the report, we still have the straitjacket on the Lothian region, and we still have the prospect of funds running out in that region. The latter consequence was put to him on 23 June. We had typical answers from the Secretary of State. That meant that he chose not to answer the questions put to him. I do not know whether he thought that the consequence could not arise, whether he intended it not to arise, whether he did not know the answer or whether he did not intend to tell us. The fact is that he did not give us an answer. The Under-Secretary answered the question. He said, in effect, "The money can just run out and we shall stand back and do nothing. We can close schools. We can pay off teachers. We can close old people's homes. We can pay

off social workers. We can stop paying policemen and firemen. We shall simply stand back and allow that to happen." That is grossly irresponsible nonsense. It cannot happen and it must not be allowed to happen.

Mr. Younger: Hear, hear.

Mr. Millan: Last week I asked the Secretary of State to withdraw the reports and instead—

Mr. Allan Stewart: rose—

Mr. Millan: The hon. Member for Renfrewshire, East (Mr. Stewart) is not the Secretary of State yet.

Mr. Foulkes: He is hoping to be.

Mr. Millan: The present one is bad enough.
Last week I asked the right hon. Gentleman to withdraw the reports and allow talks to take place. He refused to do so. He knows that the reports will be passed by the House. He has said—this has been produced as a great concession—that he will not implement them immediately, and that he will talk to the local authorities. I want him to do so. I want him to talk to the Lothian region. The authorities of Dundee and Stirling have already talked to the Under-Secretary of State.
We must be given more information about what the right hon. Gentleman expects to get from the authorities before we can welcome what he said this afternoon. We must know rather more about the proposed time scale. The Under-Secretary of State, who is always jumping into the press before debates take place, has said that the process will be completed in eight or nine days. The implication is that if everybody does not come to heel in that time the Government's proposals will be implemented and they will tolerate delay no longer.
If the Secretary of State believes that he can deal with these matters in eight or nine days, he is a foolish man. He will not be able to deal with them unless he gives the House and the local authorities concerned considerably more information about the basis on which the talks will take place. He has not answered the question about the £100 million that I put to him. He has not told the House whether his proposal of £47 million for Lothian, which I said is an impossible figure, is sacrosanct. He has not told us whether he is willing to reduce the penalty that he proposes to place on the Lothian region significantly below £47 million. He has not given us the relevant information for Dundee and Stirling. The talks will not reach a satisfactory conclusion unless he provides more information. He must realise that the talks will take place against an extremely difficult background.
When the talks take place there will have to be flexibility and give and take.

Mr. Younger: Hear, hear.

Mr. Allan Stewart: rose—

Mr. Millan: I accept that. That is what I have been appealing for from the Secretary of State for the past two years. There must be flexibility on both sides. If talks take place after the reports have been put on the statute book, he must not assume that agreement will be inevitable. There is still a danger that we shall go over the precipice and that we shall be faced with the breakdown of essential local services.
The Secretary of State will not get from the talks anything which will be satisfactory and which will prevent a breakdown taking place if he enters those talks with the


idea that he can obtain major redundancies in the Lothian region, that he can get the region to cut back on essential services and that he can impose on it, by coercion and for political reasons, a rate repayment for the current year. If he enters the talks with those attitudes, I do not believe that they will lead to a satisfactory conclusion. If he goes to the talks with a genuinely flexible approach and with a willingness to compromise, I hope that we might avert even now the worst of the crisis and the possible breakdown of essential services. So much will depend on what happens when the talks take place.

Mr. Younger: I know that the right hon. Gentleman is trying to he helpful. He has asked me to be flexible in any talks which take place. Will he make it clear that he hopes that both sides in those talks will show some flexibility?

Mr. Millan: I have already said that. It does not make sense for either side to go into talks about anything on the basis that a satisfactory settlement will be only what it wanted in the first place. Everyone realises that that is the situation, and I have already said that.
I hope that the crisis can be averted. However, I am not confident that it can. Nothing in the Secretary of State's speech added to any little confidence that I might have had that the crisis would be averted. It was an entirely negative, self-satisfied and defensive speech.
I hope that on this occasion the ultimate crisis will be averted. However, it has been an unnecessary crisis created by the Government's obstinacy on the terms of the Bill which they have put on the statute book. Whatever happens this year will have done lasting damage to local democracy. The fact is that the present Act of Parliament is misguided. It was misguided in conception and it became worse as the Bill went through the House of Commons. We opposed the Bill at the beginning. COSLA—Tory as well as Labour authorities—also unanimously opposed the Bill. The only satisfactory answer to that Bill is to have it repealed. I repeat that that is what the Labour Government will do.
If I say that I have no great confidence in the outcome of the talks, it is because, incredibly, despite the experience over the last year, the Government are talking about imposing further legislation on local authorities in the subsequent parliamentary year. That legislation would directly set rate limits for local authorities in England and Wales. We understand that that is in the mind of the Secretary of State for the Environment and that there will also be referendums on supplementary rates increases, and so on. That is an appalling prospect for local government and local democracy.
What we have to do in the House is to recognise that local government has a vital role to play in providing essential services on which the health of our communities depends. We need consensus and agreement between local and central Government, not confrontation and collision. [HON. MEMBERS: "Hear, hear."] Conservative Members can also cheer at this. In the economy, the Government have been an unmitigated disaster, which is the reason for today's unemployment figures. In their dealing with local government, they have been equally dogmatic, doctrinaire and insensitive. They have tried to bully local government into submission. We now have the worst crisis ever in relationships between local and central Government.
There is still time for the Government to draw back from the precipice, but the reports which we are now

debating are a symptom of the dictatorial approach adopted by the Government which has already done immense injury to local government and its services. That is why we oppose the reports.

Mr. Iain Sproat: I very much welcome the opportunity to speak in this debate. I was extremely surprised when I heard that the Opposition were about to use one of their Supply days to debate the conduct of the Lothian, Dundee and Stirling authorities. I should have thought that they would have wanted to distance themselves as far as possible from a local council so spendthrift, extremist and deeply unpopular with its ratepayers as Lothian. However, on the Conservative Benches we are glad to expose the waste and abuse, which we shall do with relish.
It is important to realise that this debate, nominally about three Scottish local authorities, is given wider significance by the fact that Lothian is only one of a small number of Left-wing local authorities, of which, outside Scotland, the Greater London Council and Lambeth are infamous examples, which grossly waste and misuse ratepayers' money, drive out businesses and jobs by their high rates policy, care little about the immediate needs of the majority of their own ratepayers and use the powers of local government to engineer political confrontation with the Government and to promote extremist, Left-wing policies. That is the context within which we are debating the actions of Lothian, Stirling and Dundee.
I should like to direct my remarks mainly to the case of the Lothian regional council because the basis of Lothian's defence—

Mr. Robert Hughes: Why are we not speaking about Grampian?

Mr. Sproat: Because Grampian behaves itself and runs itself properly, to the benefit of the ratepayers and taxpayers of the country as a whole. It is precisely because the local authorities which we are discussing do not do that that we are having to debate their appalling behaviour.

Mr. Robert Hughes: The hon. Member should know that in the last couple of years he and I have had more complaints from the citizens of Aberdeen about the dictatorial behaviour of Grampian regional council. There has been a total failure to listen to reasonable representations about the educational system. The hon. Gentleman knows perfectly well that the only reason why Grampian region has managed to hold down its rates is that it has failed to supply the needs and services to people in the area.

Mr. Sproat: I know no such thing. I have not had one representation from an Aberdeen ratepayer about Grampian rates, for the simple reason that the Aberdeen rates rise is four times higher than that in Grampian. In spite of the great burden which has been placed on Grampian by the oil-related industries, Grampian, remarkably, managed to increase its rates by only about 11 per cent. this year.
However, we are talking not about the splendid record of Grampian but about the appalling record of Lothian. The basis of the defence which Lothian would no doubt put to my right hon. Friend, if it deigned to meet him, is, first, that there is no waste of the ratepayers' money. Secondly, it says that there is no reasonable way in which


it can make savings. In answer to the claim that no savings can be made, in a minute I shall mention three separate and independent bodies which say that widespread savings could be made by Lothian regional council. As regards waste, I think that it will be within the knowledge of most hon. Members that this very afternoon four councillors and three officials have come down from the Lothian region at a cost of about £4,000 to the ratepayers, yet they have refused to see my right hon. Friend, although they are here for three days.

Mr. Robert Hughes: rose—

Mr. Ernie Ross: rose—

Mr. Sproat: In a way my right hon. Friend is lucky. Those people have told him that they would not see him and they told my Conservative colleagues and myself that they would see us, but they did not bother to turn up for the meeting. Therefore, at least my right hon. Friend can count himself rather lucky.

Mr. Norman Hogg: Does the hon. Gentleman equally condemn Tayside region, which, when the Local Government (Miscellaneous Provisions) (Scotland) Bill was in Committee, sent councillors down to hear what was taking place and to brief the badly briefed Members on the Government Bench?

Mr. Sproat: I am informed by my right hon. and hon. Friends on the Front Bench that that is not true. In any case, I am not responsible for what Tayside councillors do vis-à-vis the hon. Member for Dunbartonshire, East (Mr. Hogg). I was complaining that we know why Lothian councillors have refused to see my right hon. Friend and have not bothered to turn up for a meeting arranged with my colleagues.

Mr. Cook: Will the hon. Gentleman give way?

Mr. Sproat: No, I have given way too much.

Mr. Robert Hughes: On a point of order, Mr. Deputy Speaker. Surely it is quite out of order for an hon. Member deliberately to mislead the House, and in those circumstances—

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. The hon. Gentleman has used the words "deliberately to mislead". They are unparliamentary and must be withdrawn.

Mr. Robert Hughes: It is true. You put me in a difficult position, Mr. Deputy Speaker, because I cannot think of an alternative phrase to "deliberately to mislead".

Mr. Deputy Speaker: While the hon. Gentleman thinks of alternatives, perhaps he will withdraw the original words.

Mr. Robert Hughes: I certainly withdraw any unparliamentary expression—

Mr. Cook: Even if it is true.

Mr. Robert Hughes: It is within my knowledge that the remarks made by the hon. Member for Aberdeen, South (Mr. Sproat) are totally inaccurate and do not accord with the facts as I know them. If I am to be rebuked, and rightly so, for using unparliamentary expressions, surely the hon. Gentleman ought to be rebuked for stating that which he knows to be wrong.

Mr. Deputy Speaker: The hon. Member for Aberdeen, South (Mr. Sproat) is responsible for what he says in his speech, not I.

Mr. Sproat: Thank you very much, Mr. Deputy Speaker.

Mr. Ernie Ross: On a point of order, Mr. Deputy Speaker. It is important that the House should know that the reason why the Lothian councillors did not meet the Tory group was that it failed to provide a time—

Mr. Deputy Speaker: Order. The Chair is not responsible for the Lothian councillors.

Mr. Sproat: I shall not continue this argument at great length. However, 10 of my colleagues and myself sat in a Committee Room at 12 o'clock waiting for the Lothian regional councillors to arrive, but they did not come. However, that is so mild a transgression compared with all the other things that they have done that I am happy to leave that point. I have no doubt that the secretary of the committee will settle this question once and for all if he catches the eye of the Chair.

Mr. Gavin Strang: Will the hon. Gentleman give way?

Mr. Sproat: No. I have already given way too much on what is a fairly minor point about the transgressions of Lothian amid all the great villainies that will no doubt be enumerated later.
Lothian says that there is no waste. I have already shown that it spent £4,000 sending councillors down here. Those councillors have not seen my right hon. Friend. In addition, most of us know of the infamous Jersey junket a few months ago when a couple of Lothian councillors attached themselves to a school orchestra in order to get a free visit to Jersey. We all know that in the last few days Lothian councillors were flown back from holidays in sunny Spain, Greece and cosy trade union jaunts to Czechoslovakia at the expense of the ratepayers.
My right hon. and hon. Friends who have the misfortune to live under that regional council know that the Lothian Clarion is distributed to them, supposedly free but at a cost of about £12,500 per issue. I know that the Lothian council says it is less. It says that it costs only £6,000 per issue, but it subtracts what it calls "advertising". I was interested to learn that when a group of ratepayers tried to insert an advertisement in the Lothian Clarion about the high expenses drawn by certain Socialist councillors, that advertisement was refused. The council also said that it would not enter into correspondence in the columns of the Lothian Clarion.
Those are just a few of the many examples that could be culled of waste that goes on in the Lothian region. It is totally ridiculous, unfair and insulting to the ratepayers of Lothian to say that there is no waste, because there is grave waste by the Socialist Lothian council.
Quite apart from the waste, three separate groups have shown that substantial savings could be made by Lothian council. Those three groups have no connection with each other. Even if we do not agree with the precise savings, each group identified widespread savings that could be made. It is, therefore, prima facie absolutely ridiculous for the regional council to say that no savings whatever can be made. It is doubly ridiculous that the council is not prepared to approach my right hon. Friend the Secretary of State to discuss these savings.
The first group that came forward with imaginative and widespread proposals was the Conservative councillors in the region—[Interruption.] Let us deal with the Conservative councillors first. I shall come to what the Labour councillors said in just a moment.
The Conservative councillors modestly proposed cuts amounting to £27 million with no compulsory redundancies and arising entirely through natural wastage. The right hon. Member for Glasgow, Craigton (Mr. Millan) got the figures wrong. It is 3,500 jobs saved through natural wastage, not 4,000.

Mr. Barry Henderson: Will my hon. Friend bear in mind that Conservative councillors have also come to London, but at their own expense and not at the expense of the ratepayers?

Mr. Sproat: My hon. Friend makes a good point. I hope that the Lothian ratepayers will distinguish between the Socialist councillors who travel on other people's money and the Conservative councillors who travel using their own money.
Let me mention some of the ways in which savings could be made, because perhaps some Labour Members do not realise the way in which they could be made. For example, of the 15 specific proposals made by the Conservative councillors, one was that there could be a reduction in service costs in all departments at a saving of £6·5 million. They also proposed that the council could reallocate the Scottish bus group's subsidy, which the Minister has already rejected, at a saving of £3·4 million. That money could be reallocated to better means or could be saved within Lothian regional council's spending.
If, instead of free bus passes for all old-age pensioners, the council moved to a system used by its fellow Socialists in Strathclyde, it could save another £2·5 million. If it was to reduce staff training in social work, it could save another £400,000. Six months of natural wastage and the non-tilling of posts that fell vacant would save another £6 million.

Mr. Maxton: Loss of jobs.

Mr. Sproat: Not loss of jobs, because the posts lost through natural wastage would not be filled. Surely even the hon. Gentleman would not compel people to remain in jobs when they did not want to. In any case, that is happening in the hon. Gentleman's region, yet we do not hear him make a fuss or scream about that. Therefore, why should he object when it is proposed in Lothian regional council?
Even if we do not agree with all the details of the Conservative proposals, they at least show that potential savings could be made. If Labour Members do not like what the Lothian Conservative councillors propose, let them consider the contents of the so-called secret budget prepared by the Socialist councillors in Lothian region before this great fuss reached its present level of fury.
Earlier this year, in spite of the fact that the Socialist councillors now say that no savings can be made, they produced a fat report outlining no less than 80 potential areas for savings. How is it that a few months ago they said that there were 80 potential areas for saving whereas they are now saying that there are no areas whatever?
It is interesting to consider some of the areas in which the Socialists suggest that savings could be made. They suggested, for example, that costs could be cut by cutting

the commission paid to organisations not their own that collect the rates. That is a very sensible way of looking at things. These are their suggestions, not those of the Conservatives. They suggested cutting back on the cost of Securicor delivering wages in cash. That, again, is a very interesting suggestion. I believe that they suggested that about £75,000 could be saved in that way.
The Socialists also suggested—this is another interesting proposal that my right hon. Friend might like to consider—that the internal audit system could be enlarged with a view to getting, to use their own words, better value for money within Lothian region. I am sure that my right hon. Friend will be very happy to look at that proposal from the Socialist councillors. Again, they suggested that the basis on which car allowances are currently paid could be changed from what is known as the "essential" basis to the "casual" basis. They suggest that £100,000 could be saved in what is paid out in car allowances to members of Lothian region. Interestingly enough, they also proposed to increase leisure charges.
The Socialists also suggested—and I put this particularly to the hon. Member for Glasgow, Cathcart (Mr. Maxton)—that certain posts in prospect should not be filled. Apparently, although certain Labour Members do not like it, the Socialists on Lothian regional council were prepared to consider that.
The Socialists also wanted to cut back on social work staff, particularly training staff. They wanted to consider increasing school meal charges. It will be interesting to hear what Labour Members have to say about that. It was the Socialists who wanted to consider increasing school meal charges in Lothian and cutting back on primary and secondary school teachers.

Mr. Foulkes: rose—

Mr. Sproat: In other words, all the things that they are now so quick to criticise if my right hon. Friend so much as mentions them, they themselves had considered and put forward.

Mr. Foulkes: The hon. Gentleman does not want to know the facts.

Mr. Sproat: Everything that I have just said was suggested by the Socialist councillors themselves in this very interesting report by the budget review group of the regional Labour group, consisting of the Labour convener, the Labour leader, the Labour secretary, the Labour chairman of the finance committee and the Labour chairman of the manpower committee. Those suggestions came from them only a few months ago. How dare they therefore say to the House that there are no grounds for possible savings in Lothian?
I now come to the third group of people in Scotland who clearly do not agree with Labour Members that there is no area for savings in Lothian. I said that all three groups were totally independent. The Conservative councillors made some suggestions. The Socialist councillors made some suggestions. If we now look at what other Socialist councils in Scotland have done, we find that if Lothian ran its region not even as Grampian does in its cost-conscious way but as other Socialist councils do, in this year alone if Lothian were run on the same basis as Strathclyde is nun with its cost and its manning, there would be a saving to Lothian of £35 million. If Strathclyde can save £35 million, why cannot Lothian? If Central region ran


Lothian as it runs its own region, there would be a saving not of £47 million, I must tell my right hon. Friend, but of £81·5 million. Lastly—and I say this to my hon. Friend the Member for Fife, East (Mr. Henderson), who will be very glad to know it—if Lothian region were run as Fife region—another Socialist region—is run, it would save £90·5 million on its budget this year.

Mr. Foulkes: rose—

Mr. Sproat: I do not say that the proposals made by the Socialists are perfect in every detail. Why should we say that? I am sure that improvements could be made even to the Conservative proposals. But I say that if Conservative and Socialist councillors in Lothian and Socialist councillors in other regions of Scotland can all find ways of cutting costs, Lothian can do so as well. It should do so immediately—

Mr. Foulkes: Will the hon. Gentleman give way before he finishes his speech?

Mr. Sproat: —and the first thing that Lothian councillors could do is to come and talk to my right hon. Friend.

Mr. Harry Ewing: The hon. Member for Aberdeen, South (Mr. Sproat) will not be surprised to know that I do not intend to follow him in what he said, save briefly to take up two points.
First, I should tell the hon. Member for Aberdeen, South that, for all its good management, Grampian region has received the same letter telling it to review its budget as every other regional and district council. He should therefore not believe for one moment that that "well managed" region will escape the wrath of his right hon. Friend the Secretary of State. Like every other region and district authority in Scotland, it will be caught in the second round of this exercise. I shall be interested to hear what the hon. Gentleman has to say then.
Secondly, with regard to the presence of Lothian region Labour councillors, which the hon. Member for Aberdeen, South seemed to regard with some disdain, I should tell the hon. Gentleman that when Stirling district council asked for a meeting with the Secretary of State for Scotland and his hon. Friend the Under-Secretary of State, members of that council were made to come to London at the expense of Stirling district ratepayers. There are five Scottish Office Ministers—four in the House of Commons and one in another place—yet that meeting could not take place in Edinburgh. It ill becomes the hon. Member for Aberdeen, South to criticise Labour councillors for coming to London when Labour councillors from Stirling district who asked for a meeting with the Secretary of State to discuss the very proposals that we are now debating were given no alternative but to come to London.

Mr. Albert McQuarrie: The hon. Gentleman should also make clear that while members of Stirling district council came to London to see the Secretary of State—and I personally regret that, as I would have preferred the meeting to be held in Edinburgh—the members and officials from Lothian council who are here today came not to see the Secretary of State but to listen to this debate and for no other reason.

Mr. Ewing: That is far from accurate. The members from the Lothian region are here to lobby Members of Parliament. That is a legitimate exercise for elected representatives. I do not wish to get involved in why a meeting did not take place between the Tories and the councillors, but I understand that the Labour councillors from Lothian were at no time advised of the availability of the Tory Members for a meeting. No doubt that matter will be dealt with as the debate continues.

Mr. Russell Johnston: It may interest the hon. Gentleman to know that at 12 o'clock, which I believe was the time quoted as the time of that meeting, the aforesaid councillors were meeting me in my room, the appointment having been made last week. I think that the fault must therefore lie on the other side.

Mr. Ewing: I am most grateful to the hon. Member for Inverness (Mr. Johnston). That proves that I should have said what I originally considered saying, namely, that the hon. Member for Aberdeen, South sometimes sullies our debates with his observations.
I turn to the subject of today's debate, which is far more relevant than the remarks of the hon. Member for Aberdeen, South. The Secretary of State and his hon. Friend the Under-Secretary, encouraged by their less enlightened Back Bench colleagues, over the past two and a half years have become so anti-local government that they are now unable to reach any rational decision about local government in Scotland. The debate is just as much about the position that the Secretary of State and his hon. Friend have got themselves into as it is about the allegations of overspending on the part of Lothian, Dundee and Stirling and the other three authorities for which orders have already been announced.
Whatever the Secretary of State may say—and I was interested to hear him defend himself against the allegation that he is launching an attack on local democracy—this is an undisguised attack on local democracy, and that ought not to go unnoticed. I know that we are discussing three reports relating to the Lothians, Dundee and Stirling district. But, with great respect to the Lothians and Dundee, my interest is obviously in the order affecting Stirling district council.
I have read with great interest the report that has been laid on the Table of the House for our use during the debate. In the part dealing with Stirling district council I am interested to read that the representations submitted by Stirling district council on 1 July—the report does not give the date, but the letter is attached as an annex—were considered by the Secretary of State but were more or less rejected, and the Secretary of State has gone along with his original idea of tabling the report against the district council.
The Secretary of State read a few letters from the chamber of commerce and various other people who seemed to support what he was doing. May I through you, Mr. Deputy Speaker, advise the Secretary of State that as well as reading letters it would be helpful if he would occasionally write some letters. As I understand it, the detailed arguments submitted by Stirling district council on 1 July have been replied to, but a detailed argument has been dismissed in four lines of the letter, which says that the Secretary of State is still satisfied that the planned expenditure is unreasonable and excessive, and that therefore he intends to go ahead with the order.
There was no attempt at a detailed argument against the case put by Stirling district council. The Government's case is that they intend to reduce the rate support grant made available to Stirling district council by £1 million. I am entitled to ask on what basis the assessment has been arrived at. We are told time and again that the Government have used certain comparators. When I asked recently about the comparators that were used, I was given all sorts of flimsy excuses. I was given no good reason why the particular comparators should be chosen. Indeed, the comparator in which I was most interested was that made between Stirling district council and North-East Fife district council. When I asked why North-East Fife district council had been chosen, I was told that it was because North-East Fife 'district council has a university and Stirling has a university. That is the basis on which it was decided to reduce by £1 million the rate support grant to Stirling district council—hardly the most scientific basis on which to approach this very serious problem.
I say to the Government, privately and publicly, that had they chosen two other comparators that were available to them—those of Kyle and Carrick district council and of Cunninghame district council—they would have come nearer to a more comparable position than with the comparators that they eventually chose. Had they chosen Kyle and Carrick and Cunninghame district council, it would have produced a result whereby the spending per head of the population in Stirling district would have been only a few pounds per head greater than the Scottish average.
It is difficult not to believe that the Government have chosen the comparators they did in order to suit their arguments. The Secretary of State has based much of his case on the levels of public spending that prevailed in 1977, as opposed to the levels of public spending proposed for the present. That argument has to be answered, because the oftener it is said, the more people are likely to believe it.
Comparing Stirling district in 1977 and in 1981, we see a totally different district. There are four main employers in Stirling district. We have Cape Insulation, a company which makes thermally insulated material for home installation. It has been on short-time working and has had to pay off workpeople, not because of any increase in rates but because of the Government's policy on home insulation grants. It was purely and simply an act of the Government that caused the troubles with Cape Insulation in Stirling.
We have redundancy at the John Player factory. I am glad to see that the hon. Member for Aberdeenshire, East (Mr. McQuarrie) is present. Fifty jobs are being shed not because of any increase in rates but partly because the hon. Member succeeded in reducing the duty on derv and, as a result, increased the duty on tobacco. The immediate effect of that in Stirling is that 50 jobs have been shed by John Player. That has nothing to do with the increase in rates.
Then we have the university, which is in the constituency of my hon. Friend the Member for West Stirlingshire (Mr. Canavan). It has had a 25 per cent. cut. Only today we were told by Sir Kenneth Alexander that if the cuts go ahead at Stirling university, he will need to shed up to 80 or 90 jobs there. That has nothing to do with the increase in rates in Stirling district council. It is a direct result of Government policy, and Stirling district is the largest single employer of labour in the Stirling area.
If those cuts are imposed by the Government, new jobs that might have been created will not be. On this day, when Scotland has 320,000 unemployed and badly needs job opportunities, those opportunities will be denied.
The historic fact about Stirling, as a town council and a district council, is that it has a very low spending record. When the council was controlled by a combination of Tories and SNP members, there was hardly a single new brick laid for housing, and community centres were almost non-existent. The facilities in Stirling were nothing short of disgraceful. It is natural that when a Labour council comes to power it will want: to provide better services and new facilities. So, historically, Stirling starts from a very low base.
The Government's actions are unrealistic, and I suspect that the Under-Secretary of State at least has the intelligence to understand that. It is simply not on for a Tory Government to seek to impose on Labour-controlled authorities a situation in which they are forced to reduce the rates and hand the matter back to the ratepayers, to allow the Minister to say that it was he who forced the Labour-controlled authorities to reduce the rates and hand the money back to the ratepayers. The Minister has had it explained to him that if this 'were to happen in Stirling, the weekly amount handed back to ratepayers would be less than 38p. The Secretary of State lives, as he admitted, in the Stirling district, in Gurgunnock. Gurgunnock is not quite Raploch, St. Ninians, Braehead or Riverside. Something needs to be done for those areas. I am not saying that they are run down. They are anything but run down. We have been able to build up good environmental conditions in them. However, we want to continue to be able to do so.

The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): I have genuine difficulty in following the hon. Gentleman's point. Is the hon. Gentleman seriously suggesting that if a local authority is faced with the choice of returning grant involuntarily to the Government or of giving it back to the local community—through a reduction in the rates—there is no case for returning the money to the local economy and that an authority should prefer to give it to the Secretary of State?

Mr. Ewing: The Minister has completely missed the point. He is a good enough politician to understand that, politically, it is no more possible for this Government than it would be for a Labour Government to force Tory councils to reduce rates and to hand the money back to ratepayers. If the Minister wants to take the money back from Stirling district council, he will do so. If he wishes to return money to the ratepayers, the Scottish Office should bear the cost of doing so. The administrative cost of returning that money to Stirling's ratepayers would be greater than the amount to be returned.
Even if Stirling district council and the Government came to some agreement or compromise arrangement, it would not be the end of the matter. Nor would it be the end of the matter for Lothian or Dundee. Stirling, Dundee, Lothian and all the other authorities will be caught, yet again, in the second round of the exercise. If the Minister wishes to tell me that this is the end of the matter for Stirling, I shall be happy to hear that from him. However, that is not so. When the Government make their general


clawback, Stirling will be affected in the same way as the Central region, Falkirk, Banff, Grampian and the other authorities.
Falkirk district council, which lies in my constituency, received a letter from the Central Scotland chamber of commerce which congratulated it on its good management. It is a Labour-controlled authority. However, that letter will not save Falkirk district council from the impact of the second round of the exercise. The argument lies between ratepayers and their elected representatives. I do not back away from facts, and I am the first to admit that although several people in the Stirling district do not complain about the rate increase, some do. However, that is not an argument for the Secretary of State to settle. It is not his business. If the Secretary of State paid more attention to the job that he is supposed to do, and left other people's jobs to them, there might not be 320,000 people unemployed in Scotland. The argument is between the ratepayers and the district council. The argument will be settled by the normal democratic process in which councillors face the electorate. Those councillors were freely elected and are prepared to defend their policies and to accept the will of the electorate when the time comes.
This is not merely a bad day for Scottish local government but a disastrous one. The only consolation that I have drawn from the debate is that the Government have not got much longer in office. They will still do a great amount of damage, but when the Labour Party is re-elected we shall at least have an opportunity to repair some of it. This is a disastrous day for Scottish local government.

Several Hon. Members: rose—

Mr. Speaker: Order. It looks as if speeches will be a little long. Many hon. Members wish to speak and it would help if hon. Members bore the length of their speeches in mind.

Mr. Michael Ancram: I hope that the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) will forgive me if I do not take up his argument about his district authority. I wish to concentrate on my regional authority of Lothian.
Many Conservative Members were agreeably surprised and appreciative when the right hon. Member for Glasgow, Craigton (Mr. Millan) was good enough to suggest—for the first time from the Oppositiion Front Bench—that the Lothian Labour group should talk to the Secretary of State. I hope that the message will get through to the Lothian Labour group that its colleagues on the Front Bench—and I hope also on the Back Benches—believe that the time has come, if it did not come much earlier, for both sides to get round the table and to consider the matter sensibly.
Several hon. Members referred to the dangers to local democracy of the Government's proposals. When I hear the hon. Member for Stirling, Falkirk and Grangemouth talking about the threat to local government, it surprises me. When the Labour Party is in power and threatens an English council in Tameside over its education policies, it would seem that that is not a threat to local government. However, when the Conservative Party is in power and does something to local authorities, it is threatening local

government. We must be cautious about exercising double standards and accusing each other of attacking local democracy. Hon. Members on both sides of the House believe that local democracy has an important role to play. In many ways it is a sad day when a debate on such a report must take place in the House.
I assure Opposition Members that Conservative Members do not take any pleasure in the report. Most of us had hoped that the Labour councillors of Lothian region would have seen reality many months ago and thus avoided the need for all this. There is a delicate balance between local government and national Government, which has always been fragile. By and large, most local authorities—whatever their politics—have understood that ultimately they must conform to the national economic pattern if the system is to work. Most Scottish regions have done that, including Labour regions such as Strathclyde, Central, and Fife. At least those authorities have tried. That effort has been recognised.
It is a matter of great shame to the people of Lothian that we should be the only region to have abdicated that responsibility and to have necessitated the laying of a report against us. Let us be quite clear. This discussion should be about finance and economies. On our side, it is about that, but it has not and never has been about that for the Labour group on Lothian region. From the start it has seen the argument as a party political issue and as a political fight in which, like some extra-parliamentary opposition, it seeks to make up for what it perceives to be the failings of its colleagues in the House. In the fight, the Labour group's members have been prepared from the start to put the ratepayers and electors of Lothian into the front line to take the flak, regardless of the damage that their stand does to those whom they were elected to serve.
It is not surprising that so many of us in Lothian are angered and saddened by the attitude of the Lothian Labour group. Like some puffed-up soviet, it has refused to talk, to budge or, even now, to think. However, I congratulate it on one thing, namely, its propaganda. If propaganda is distortion by selective fact, or the creation of unfounded fear among people who trust the Labour group, it has done its propaganda job remarkably well. It has frightened parents with talk of savage education cuts. It has frightened pensioners with tales of slashed essential services. It has frightened voluntary organisations by threatening their survival and it has frightened its work force with talk of enforced redundancies for about half of them.
All these threats are based on specious arguments, unsubstantiated assumptions and, in some cases, plain distortions. It knows that its claims are untrue but, for party political reasons only, it continues to proclaim them. If it was genuinely interested in securing the most cost-effective service for the electors, it would not have indulged, I believe, in this language of unreason. It would have looked for a reasoned analysis and negotiated on that basis with the Secretary of State. My right hon. Friend has given it every chance. He still does so. In fact, a provision for consultation is written into the 1981 Act. My hon. Friend the Under-Secretary of State, the Member for Edinburgh, Pentlands (Mr. Rifkind), and my right hon. Friend have said all along that they were willing to listen and willing to take part in talks. Lothian region has, however, refused to come to the table for fear, perhaps, that under this sort of analysis its propaganda would not stand up.
Let us recognise, as the right hon. Member for Craigton did, that it takes two to tango, and that it takes two sides to talk. Faced, as Lothian region is if the order is passed, with an inevitable cut in its expenditure, it should, if it really has the interests of its electors at heart, talk and negotiate now. If it does not and if it forces my right hon. Friend to make the full reduction, the responsibility for the consequences is its and its alone. It alone has the power at this moment to do something about the matter by talking. If it fails to do that, it will have failed those whom it was elected to serve. Every week of delay causes more damage to those interests.
Watching the Labour councillors from Lothian region, I get the impression sometimes that it takes a little time to get thoughts into their politics-filled heads. After their two days in the GLC county hall with Councillor Ken Livingstone, it may take a little longer. I urge my right hon. Friend the Secretary of State to be patient. I was pleased to see yesterday that he had announced that he would give them a few more days to come to the table to talk.
Seriously, no one likes to have to make economies. That is appreciated. We sometimes have to make them. Indeed, the right hon. Member for Craigton had to make them himself when he was Secretary of State. When we have to make them, we often find surprising areas where such economies can be made without causing too much damage. What is not possible is to find such areas if the will is not there and if the Lothian Labour group remains so attached to its hyperbole and propaganda that it is not prepared to seek them. It knows in its heart of hearts what savings can be made.
I do not know how many hon. Members saw the programme on television when the Labour group of Lothian region, believing in open government, appeared before the cameras to discuss at what level it would set the budget. There was no talk then of only one possible level and that that it should be unanimously accepted that a 50 per cent. rate rise was needed. Two levels were suggested. One of them, if my memory serves me right, was 35 per cent., and the other 50 per cent. One was the level that the Labour group was advised by the report, to which my hon. Friend the Member for Aberdeen, South (Mr. Sproat) has referred, was needed to maintain services. The other was the level needed to increase growth. It chose the latter, not because it needed the 50 per cent. but because it decided politically to confront the Government. If that had not been its intention, why did the Labour group go on television to let everyone in the country know what it was doing?
Its acceptance of areas of potential saving at that time was based on what I agree with my hon. Friend the Member for Aberdeen, South is an excellent report. I am surprised that members of the Labour group have not referred to it more often themselves. On the occasions when I have appeared on radio programmes opposing their view, they have denied its existence. I was interested to recieve a copy last night. It is fascinating reading.
Paragraph 28 of the report accepts the fact that falling school rolls will mean fewer teachers and that fewer teachers will enable savings to be made in those areas. That was the talk in January this year. Where has that talk gone? [Interruption.] The hon. Member for Glasgow, Garscadden (Mr. Dewar), from a seated position, says that this was done. I wonder, when the hon. Gentleman comes to speak, if he can explain why 70 new non-teaching staff

were taken on by the Lothian region at a cost of £350,000. The report shows, if it shows nothing else, that the argument of the Lothian regional council that it cannot cut anything is shot through with holes. The council knew four months ago the areas where cuts could be made.

Mr. Henderson: Is it not the excuse that Lothian region has made one cut concerned with emergency planning and civil defence services, for which it gets 100 per cent. rate support grant from the Government?

Mr. Ancram: I am grateful to my hon. Friend for reminding me of that fact. It illustrates once again that the actions of this council are not based on the interests of those it was elected to serve but are based on its members' personal political view. For the sake of the people of the Lothian region, I hope that those members will soon come to their senses.
My hon. Friend the Member for Aberdeen, South mentioned the Conservative proposals put forward last week. A number of Opposition Members have talked about job losses and were surprised when it was suggested that natural wastage was not necessarily a job loss. If the Opposition take the view that every job that has ever been filled must continue to be filled ad infinitum, they will find themselves in a most extraordinarily queer economic mess if the misfortune ever occurs that they govern the country again. One can imagine the areas where jobs would be still preserved 200 years after the Industrial Revolution if that view had been adopted. The hon. Member for South Ayrshire (Mr. Foulkes) knows it is nonsense. He is right.

Mr. Foulkes: I have just walked in off the street.

Mr. Ancram: The hon. Gentleman was nodding intelligently. When he nods intelligently, I presume that he understands.
I believe that the Government should look closely at the proposals put forward by the Conservative group. Within those proposals is the basis of a possible negotiation. The group has worked hard to try to achieve a position where the maximum saving can be made before the dangers of enforced redundancy become too hard.
It is not my intention to put forward a figure that I believe is right. To do so would preclude precisely what I am asking. I wish the two sides to get round a table and talk to each other. I believe, however, that the Conservative proposals are worth examining. I hope that the Minister, in his reply, will comment upon them. It cannot be argued that there are no areas where cuts can be made. I believe, as my right hon. Friend stressed, that we must accept that cuts should be made. Hon. Members may be surprised to hear that it is my view, as a Lothian Member of Parliament, that cuts should be made in any areas. It is always unpleasant to see cuts.
I believe, however, that I am a realist. In the present economic situation, we cannot continue to spend at the same rate as we have been spending in the past. It is interesting to note one or two of the facts contained in the report that we are debating showing the trends of expenditure in Lothian region. The chart in appendix B dealing with expenditure per capita shows that in 1978–79, expenditure in what are termed closely comparable authorities amounted to £319·9 per person on average. For all regional councils, the figure was £350-odd. The figure for Lothian regional council was £347, not as high as the average for the whole number but higher than the average for the comparable authorities.
By 1981–82, the current year, the average for the comparable authorities was £332, an increase of 4 per cent. The average for all regional councils, the figure which Lothian was originally below, had increased to £372, a rise of 6·5 per cent. Lothian region was up to £426, far in excess of the average of all the others put together and an increase of 22·7 per cent.
In fairness, I find it hard to see why one council, particularly at a time of economic stringency and when it does not face the sort of problems that I came across while I was working in the courts in Strathclyde, should continue to expand its expenditure.
The second chart that I ask hon. Members to look at is appendix D, which shows the increased rate poundages in Lothian. In 1978–79 rates were 44p in the pound, in 1979–80 they were 53p, in 1980–81 they were 75p and in 1981–82 they are 112p. Those figures represent almost a threefold increase in four years, and that is the burden placed on the ratepayers and businesses of Edinburgh.

Mr. Foulkes: The hon. Gentleman expresses an interest in small businesses, but will he care to pay attention to the situation in Cumnock? A small business man from that area wrote to me to say that he had had to pay off two apprentices because the local district council was unable to place any contracts with him as a result of the cuts in public expenditure that the Government have already imposed on local authorities. Is it not the case that for every job lost in the public sector there could be at least one lost in the private sector, particularly in contracting?

Mr. Ancram: The hon. Gentleman is continuing to perpetrate the distortion that is put forward by the Lothian region. We are not talking about slashing services. The right hon. Member for Craigton pointed out that of the 37p in the pound increase in rates this year only 11p was for new growth in Edinburgh. That was the extra amount, the part that was not reserved for maintenance.
If the Conservative proposals were accepted and £26 million were passed back to ratepayers, it would be the equivalent of a 12p in the pound rebate—almost exactly the amount devoted to growth in Lothian. That could be done without causing the damage that has been predicted by Lothian regional councillors.

Mr. Cook: Will the hon. Gentleman clarify a point that is becoming increasingly confused the longer he addresses the House? Does the hon. Gentleman propose to vote for £26 million being excessive and unreasonable or, as the Government urge, for £47 million being excessive and unreasonable?

Mr. Ancram: I intend to vote for the report because it will enable my right hon. Friend the Secretary of State to exercise a degree of restraint on the Lothian region if it continues its intransigence. That is within my right hon. Friend's power.
It must be understood that we are not talking about a massive slashing of services. Labour Members know that. We are talking about trying to bring Lothian region back from the brink of over-expenditure and always going for growth and political confrontation. That has been the source of all the problems in the region over the past three years.

Mr. Foulkes: Will the hon. Gentleman give way?

Mr. Ancram: No. I have given way several times and I wish quickly to summarise and conclude my remarks.
We must never forget that the debate, the legislation and the report are all about the ratepayers. The aim of the legislation was to provide for the first time in our history that a council that had taken too much in rates should be enabled to pay money back to the ratepayers.
I believe that a rebate at 12p in the pound, or higher, would be welcomed by the hard-pressed ratepayers of the Lothian region. The Conservative group's proposal would mean a rebate of £72 this year for the owner of a house with a rateable value of £600. That would be a considerable rebate for the owner of such a house.
Small businesses of the sort to which the hon. Member for South Ayrshire referred would receive a rebate of about £1,500, which might represent the difference between keeping people in employment or sacking them. The Conservatives' proposal could mean a difference of £40,000 for some of the stores in Princes Street where my constituents shop. For some stores, that could be the difference between survival or going under, with all the job losses that would be involved.
Ratepayers are the responsibility of us all. I hope that the message that goes from the debate to the Lothian regional council will be "For goodness sake stop playing politics and start thinking about the people of the Lothian region. Get round the table and talk and give back to the ratepayers the money that rightfully belongs to them."

Mr. Ernie Ross: The doctrine of monetarism which is being pursued by Conservative Members and the Government is extremely hostile to public services and public servants, as the debate will show when more of my hon. Friends catch Mr. Speaker's eye.
The stated intention of monetarism is to increase the ratio of workers in private industry to those in the public sector. In the Prime Minister's Britain, jobs are fast disappearing in both sectors, as today's unemployment figures dramatically demonstrate. Despite the fact that the Prime Minister has failed to achieve her objective, she continues to ignore advice from such diverse bodies as the CBI, the TUC, the STUC and COSLA and the Government continue an experiment which has obviously failed. That can only be bad news for local authorities and even worse news for their employees.
I should like to bring into the debate some of the points raised by my district council in its submission to the Secretary of State, because it is important to get them on the record so that a wider audience will know how responsible the Dundee district council has been.
Local government is important to democracy. It removes responsibility for large areas of the public services from Whitehall and power is therefore distributed much more widely than the central State machine and can be used as a counter-weight to corporatist tendencies.
If more decisions are transferred to central Ministries, those Ministries will become less accountable, for two reasons. First, centralised decisions are easier to keep secret and, secondly, the sheer complexity and scale of centralised industries make it far more difficult for Ministers to be held accountable to the House. If the process of centralising power continues, local accountability will be transferred away from councillors and eventually to the relevant Ministers. That is the theory, but


in practice the process of accountability will inevitably get lost along the way. Therefore, we are about to see a major weakening of the ability of Parliament to call bureaucracy to account for its actions.
Apart from the destruction of vital services, the new Act goes a long way towards turning local government into a mere outpost of central Government rather than a democratic tier of government with a degree of independence and accountability to its electorate.
The Secretary of State has taken the view that Dundee district council's planned expenditure for 1981–82 is excessive and unreasonable in relation to the guidelines issued by the Scottish Office, in spite of the fact that, since their introduction, those guidelines have been accepted by all concerned as having no mandatory effect on individual authorities.
In Dundee in previous years at budget time it has never been possible to keep within the guidelines. In 1980–81 the guideline figures were calculated and adjusted on a different basis and Dundee's figure was reduced by £1·48 million—14·7 per cent. In 1981–82 the Dundee guideline figure was further reduced, this time by 8·1 per cent.—£7·91 million. In those two years, the reported all-Scotland reductions in guideline figures were 3·2 per cent. and 5·9 per cent. respectively. The Dundee reductions of 14·7 per cent. and 8·1 per cent. compare most favourably.
The district council's guideline figure for 1981–82, if calculated on a straight per capita basis and without subsequent manipulation, would have been £8·8 million. If subjected only to the all-Scotland percentage reduction, it would have been about £9·19 million. When the adjustment for interest on revenue balances is made, as has been accepted by the Secretary of State, Dundee's planned expenditure per capita for 1981–82 falls from £60·5 million to £58·2 million. The all-Scotland average expenditure per capita is £57·4 million, and a difference of £0·82 per capita is not considered to be excessive or unreasonable in the circumstances. The comparison with 1978–79 and 1981–82 may be fair, looking at Scotland as a whole, but the district council feels that insufficient consideration has been given to various matters.
First, in Dundee the population has been reducing over the years, largely due to people moving into Fife and Angus to live bat commuting daily to work in the city. The population drift has had a considerable influence on any exercise where population figures are used—for example, the calculation of the standard penny rate product in determining the district rate and the distribution formulae for various Government grants.
Secondly, in 1978–79 the district council was in the process of completing or had just completed a number of large-scale projects, such as the new central library and the new refuse incinerator. For that reason, it has not been possible to absorb the additional running costs generated by those items against savings elsewhere. In a recently published table of rates payable by ratepayers throughout Scotland, the highest average is given as £466·57 and the lowest as £95·16. The all-Scotland figure of £270·63, compared with Dundee's figure of £253·69, does not show that the Dundee figure is excessive or unreasonable. There are only 32 authorities in Scotland where rates are below the Dundee figure and, with the exception of Aberdeen and one or two others, they are mainly rural, not urban, authorities. It has long been accepted that the problems

facing urban authorities are different from those facing rural authorities. That is reflected in the services offered to the public.
The district council's view is that the extent of the multi-deprivation problem and the high unemployment in Dundee warrants at least the same amount of expenditure as that of other urban authorities such as Renfrew and Glasgow. The problem of unemployment is extremely serious in Dundee.
In Dundee this year the figures issued by the Manpower Services Commission suggest that 1,685 redundancies have been notified since January 1981. In the construction industry in May there were 1,264 unemployed, or 24 per cent. The regional organiser for the Union of Construction, Allied Trades and Technicians in the Dundee area, Mr. Jack Johnstone, on 3 July this year, made it clear to all those who were prepared to listen that by November this year eight out of 10 of those employed in building and construction would be without a job. At the same time, he revealed that over 300 workers had been issued with redundancy notices that week. There is a continuing and serious problem at Robb Caledon, where 280 workers could lose their jobs. At Keiller's 130 jobs will go this month. At Watson's whisky bond 135 jobs will disappear. The entire work force will leave in October. Valentine's recently announced a job loss of 25 in August.
The local building trade employers approached the hon. Members for South Angus (Mr. Fraser), Dundee, East (Mr. Wilson), Perth and East Perthshire (Mr. Walker) and myself and asked us to approach the Government as they were concerned about the cuts in Government grants to local authorities.

Mr. Peter Fraser: If the hon. Gentleman wants to make that point, he should set it in the context that if, as the Government requested, rents had been taken up in line, which most other Labour-controlled authorities did, for the construction industry in Dundee alone there would have been more than £3 million to enable it to look after the industry, to allow for new houses and maintenance. However, Dundee district council, in a deliberate political approach, decided not to do that. Accordingly the council must take direct responsibility for the large numbers of people in the construction industry in Dundee who are without work.

Mr. Ross: I am sure that if I pursued the subject of housing many hon. Members would remind me that housing is not dealt with in the reports.
The local authority made six sites available to private builders to allow them to build on those sites. Not one of those sites has been taken off the hands of the district council, nor is it the intention of the local private building industry to take these sites off our hands. Because of high interest rates and the over-valued pound, the private industry cannot afford to develop the sites.
The local building employers made it clear that
Most of us believed at first that most of the Government's policies were good and that an improvement would eventually come but now we are disillusioned".
They are disillusioned, just as the textile industry in Dundee is disillusioned, with the Government's policies.
The reports will do nothing for the unemployed, especially the young unemployed. There are now more young people aged 18 and under out of work in Dundee than the total number of unemployed of all ages in 1966. It is no credit to the Government that since they came to


power the number of people out of work in Dundee has risen by 87 per cent. If the hon. Member for South Angus could suggest how we can reverse that trend, the debate might liven up. It is ironic that the only place in Dundee where employment has increased is at the local labour exchange, where 21 new staff have had to be taken on to cope with the massive increase in unemployment in the area.
The district council's view is that the planned expenditure for 1981–82 is not excessive and unreasonable. The cuts in expenditure of the magnitude ordered by the Secretary of State will reduce services intolerably. However, it appears that the Secretary of State has decided that the increase in expenditure for councils is greater than it need be. It is greater because the councils need to maintain the expenditure on services per head of population at the same level as other comparable local authorities. The Secretary of State implies that there has been an increase in staff in previous years. However, Dundee district council can prove from its records that the total number of staff employed on 31 March 1978 was 3,059 and on 31 March 1981 it was 3,046. An increase in staff for the housing division has been more than offset by savings in other departments.
The Secretary of State has said that expenditure is excessive. One would therefore expect staffing levels to be excessively high, but they are not. In the years from 1978 to 1981 the Government have continued through additional legislation to request, and in some cases compel, local authorities to administer additional services. My council has provided those services and has incurred additional expenditure. At the same time, through co-operation with the trade union movement, it has effected a slight reduction in manning levels. Therefore, increases in expenditure have gone directly on services to the ratepayers of Dundee district council. At the same time, the proportion of expenditure on staffing costs has fallen.
None of that apparently is to be taken into account, but the Secretary of State's proposed cut in the rate support grant directly threatens the livelihood of at least 900 employees and will result in the payment of £2·7 million in unemployment benefits, thereby doubling the cost to the public purse. The district council has said that it will continue to monitor expenditure in 1981–82. In view of the unemployment level in Dundee—which currently is 15,168, or 15·5 per cent.—the district council is not prepared to increase that level by causing redundancies among district council employees.
Yesterday a meeting was held in Dundee of organisations which believe that Government policies might lead to the type of tension which has arisen in other cities. The leader of the administration decided that rather than allow the Government's policies to reach the point where young people, who are already beginning to feel alienated, take part in such action, he would call a meeting in the city chamber. The industrial chaplain, community councils, the Tayside community relations council, the social services association in Dundee, the Scottish Association for the Study of Delinquency, the Indian Association, the Islamic Association, social work representatives, full-time trade union officials and even representatives from the Churches attended to discuss the effects of the Government's policies on the city, which will continue if the motion is passed.
The industrial chaplain, Mr. Roger Clark, who has other responsibilities, said that we must create about 6,000 jobs under the youth opportunities programme. We accept that such temporary jobs are not perfect in the long term; they are but a temporary amelioration for young people. The new jobs will have to be created in the local authorities. Clearly, if the reports are approved and Dundee's rate support grant is cut, such an opportunity could not be offered by the district council.
The Government want conflict between the local authorities and their employees. We intend to refuse to play into their hands. The blame for the situation must be laid squarely and fairly at the Government's door. They are withholding Dundee taxpayers' money from the city.
I hope that the hon. Member for Dundee, East will catch your eye, Mr. Speaker. I cannot avoid mentioning him because he helped to bring this hideous Government to power. The Government are now attempting to take revenge on Dundee by cutting its rate support grant. The hon. Member for Dundee, East has attacked Dundee district council for raising its rates by 150 per cent. He has not said what the SNP would have done. He has attacked the district council repeatedly, but all that he has said is that the SNP would raise rents in Dundee by no more than the increase in average earnings in Scotland.
I have news for the hon. Member for Dundee, East which will also interest the hon. Members for South Angus and Perth and East Perthshire. The Minister responsible for industry in Scotland has informed me that average earnings in Scotland rose by 17 per cent. last year. If rents in Dundee had risen by 17 per cent., rates would have had to be increased by 121 per cent. If the hon. Member does not believe me, let him consult Dundee district council's finance department. He has bitterly criticised the council for raising rates by 150 per cent. He is terrified to mention that the SNP's policy would have meant a rate rise of 121 per cent. That is the type of cowardice that we expect from the hon. Member.
My council will continue to monitor its expenditure. If the reports are approved and the Secretary of State goes ahead and takes £2 million from Dundee's rate support grant, unemployment will be created. That will increase further the gloom and deepen the anxieties among ordinary people in Dundee. That is why I ask right hon. and hon. Members on both sides of the House not to approve the motion.

Several Hon. Members: rose—

Mr. Speaker: Order. I shall be leaving the Chamber shortly, but I must point out that speeches are becoming longer. I am anxious that the other areas as well as Lothian should be covered. We can do that only if speeches are shorter.

Mr. Russell Johnston: I shall abide by your instruction, Mr. Speaker. The Secretary of State must face the fact that the course that he is following has attracted not simply partisan, political criticism but general criticism across the board.
I expect that he read in The Scotsman the other day the article by Mr. Arthur Midwinter—a poignant name in the present economic circumstances. Following two years' study, Mr. Midwinter has produced a quiet, cogent but devastating critique of what the Government are doing.
Nobody can deny the Government's right to exercise, or to try to exercise, some control over Government expenditure. However, it is an over-simplification to say that that simply is what they are doing.
Action against Lothian, Stirling and the other authorities is being taken not because expenditure triggers rate support grant contribution from the Government but because they have chosen to maintain high service spending by exercising their statutory right to increase rates or to draw on their own resources.
If the Government argue that rates are unfair or regressive and fall only upon certain elements of the community, they should have done something about it before the issue was such an important priority. If, on the other hand, the Government say that authorities should control rate percentage increases—which is what they have said—they could have passed legislation limiting rate increases to a particular percentage in any year. That would not be regarded as terribly unfair because it is generally agreed, particularly in countries where local taxation is a form of local income tax, that the system should operate within certain statutorily defined parameters. Instead of doing that, the Government have taken powers to impose penalties on an arbitrary basis on those who have exercised their democratic right to raise taxes.
My first point is that if we believe in local government and local discretion, irrespective of whether one likes the way in which that is exercised—and the Tories have always claimed that they believe in that—what is proposed is wrong in principle and must be opposed.
My second point concerns the question of local democracy and the idea of a mandate. If the Government wish, they can limit rate increases, or they can change the form of tax. The Government can set the parameters and then, in theory, it is up to local democracy. However, there is a fair amount of evidence that Lothian, for example, has acted in an unreasonable way in the dispute. In particular, it has demonstrated an almost complete unwillingness to compromise. It cannot demonstrate popular support for that.
The hon. Member for Edinburgh, East (Mr. Strang) grunts. It must he recorded that the controlling Labour group in Lothian has an overall majority of only one. That rests on a 40 per cent. share of the votes cast. If one considers the whole electorate of the Lothian region, including those who did not vote, it will be seen that only 17·5 per cent. of the electorate voted for the controlling Labour council. Despite that, the Lothian Labour group has been unwilling to compromise, not only with the Government but with any other political groups in the council. Committees have fixed majorities. The place is run as a one-party State.
A rigid, dogmatic approach to local government of that kind is inappropriate. It does not fit my definiton of democracy, local or otherwise. Not only at national level is electoral reform urgently needed. If we do not have give and take and openness in Government, public administration can quickly become impossible and the atmosphere can quickly and gravely be soured.
I draw the attention of the House to a letter from Councillor Donald Gorrie—the only Liberal regional councillor on Lothian district council—in The Scotsman on 7 July. He was commenting on the one-day strike in Lothian in support of the opposition to the cuts. He said:

Like other councillors, I have been told personally by participants that employees were told that the Labour Group, their employers, demanded a well-supported strike and that those not striking would be noted for future loss of their union card in a 'closed shop' area—which would mean losing their job too—or for top of the redundancy list in other professions.

Mr. Norman Hogg: Will the hon. Gentleman give way?

Mr. Johnston: I shall give way when I have finished this point.
Councillor Gorrie went on:
The atmosphere created was so bad that some managers felt they had to advise inquiring employees to go along with the strike in the interests of their own job security.
If that sort of development is taking place, it is a matter of profound concern, especially as we are facing real redundancies.

Mr. Norman Hogg: It is important for the record—and the hon. Gentleman should know—that I attended a meeting that was called to discuss whether the Lothian branch of NALGO came out on strike on that day. There was none of the coercion about which the hon. Gentleman spoke. There was free, frank and open debate at a packed meeting in the Usher Hall, where well-known Conservatives, Liberals, members of the SNP and Labour Party all argued the case. A decision was made democratically, and nothing such as the hon. Gentleman and Councillor Gorrie refer to took place.

Mr. Johnston: I simply draw the attention of the House to what Councillor Donald Gorrie, who, in my experience, is an honest man, said.

Mr. Cook: It is not good enough for the hon. Gentleman to say that he is merely regurgitating the words of Councillor Gorrie. He must take responsibility for quoting words that he believes to be correct. Coercion might explain the one-day stoppage, but, if that were so, perhaps the hon. Gentleman could tell me, as one who addressed the demonstration—because it might explain why some people did not turn up to work that day—how 12,000 employees of Lothian region found their way to Princes Street on a day when public transport was not running, to take part with every appearance of willingness and enthusiasm in the demonstration, and why 5,000 of them stayed throughout the rally thereafter.

Mr. Johnston: That is as may be. I simply said that Councillor Gorrie recorded in an open letter in The Scotsman that he had had approaches of that sort, and I think that it is quite proper to repeat what he said. I do not believe that he would have written those words unless that had happened, and I think that an undesirable atmosphere has been created.
My third point is that there has to be a compromise. There is no question about that. Both sides have to talk, as the right hon. Member for Glasgow, Craigton (Mr. Millan) said, and both sides must be willing to be flexible The Secretary of State must accept, first, that the proposed cuts cannot be made in the time proposed without a devastating and unacceptable impact on services. One cannot take about £47 million out of six months' expenditure without a dreadful effect, particularly on the voluntary sector. Secondly, he must accept that the basis of the priorities—the so-called guidelines—is very unclear and some people regard them as unfair.
I quote briefly from Mr. Midwinter's article, and I hope that the Minister will respond. Quoting the Lothian example, he says:
Although Lothian recorded quite large rate increases, only a small part results from actual service growth, 14·5 per cent. in 1980–81, and 28·1 per cent. in 1981–82. The combined effect of Government decisions is much more important, even omitting the local decision to fund services on which net grant has previously been paid. These Government decisions account for 44 per cent. of the increases in rates in 1980–81 and 48 per cent. in 1981–82.
It is, therefore, unfair of Government to be using rate poundages as a means of determining excessive and unreasonable expenditure, when their own decisions have been the major determinant of these rate increases.

Mr. Rifkind: If a local authority refuses to make economies it is inevitable that the proportion of the expenditure that will have to be paid for by the rates rather than by the rate support grant will become much higher than it would otherwise be.

Mr. Johnston: There is some truth in that, but the question then is whether the Government, in operating this particular mechanism, are approaching the matter in the proper fashion. I agree that it is incredible that the council should state that no economies can be made. Reference has been made to the Tory proposal for savings of £26 million; the Liberals and Social Democrats suggest savings of £23 million, which they say can be made without significant service cuts, and the SNP proposes savings of £14 million. It is possible that cuts can be made.
Dealing briefly with the remarks of the hon. Member for Aberdeen, South (Mr. Sproat), it is unfair to suggest that it is an improper use of money for the chairman and the treasurer of a council to come down and lobby hon. Members on a matter definitely affecting them. It is correct that they should do so.
To return to the point, in Lothian there is no sustained system for evaluating performance or reviewing efficiency, which is a mistake. As a Liberal, I am oppossed to the cuts and appalled at the damage that they do to supportive services, let alone the potential further increase they may cause in unemployment. However, first, I wish to see the efficient use of resources, and, secondly, I must face the fact that we are dealing with a Government who make the law, even if I do not like the law that they make, or reject the mandate upon which they were elected.
I conclude by appealing to the Government and to the local authorities to turn back from the precipice, because it can only do the gravest damage to the provision of services. The job of the politician is to resolve differences in a way which, although it may achieve as much as possible for the view that he favours, must also, if the solution is to be acceptable and durable, take some account of the views of others.

Mr. Albert McQuarrie: I understand that during my temporary absence from the Chamber the right hon. Member for Glasgow, Craigton (Mr. Millan) said that the Banff and Buchan district council had increased by 35 per cent. my right hon. Friend the Secretary of State's guidelines. However, that amount is infinitesimal compared with the £47 million for Lothian regional council. The right hon. Gentleman did not point

out that last year the Banff and Buchan district council did not increase its rate poundage by one penny, and the previous year it increased it by only 1p. If local authorities in the Grampian region such as Gordon and Banff and Buchan can do that, why cannot Lothian, Dundee and Stirling?
We are supposed to be debating my right hon. Friend's proposals to withdraw part of the rate support grant from three Scottish local authorities that have refused to implement his request to reduce expenditure. Subject to parliamentary approval, he has the powers to make the cuts against local authorities that he believes will incur excessive and unreasonable expenditure. There is no doubt that those authorities have consistently ignored his requests in the past two years and have paid no heed to setting a local budget that takes account of our economic position and the abject need to minimise the burden not only on ratepayers but also on taxpayers, as the greatest proportion of the RSG is provided from the central public purse.
If all local authorities acted in the same manner as the three that we are discussing, there would be cause for widespread concern about the future of local government in Scotland. However, many, including Banff and Buchan and Gordon in my constituency, have gone a long way to meet my right hon. Friend's request. As a result, the ratepayers of those authorities have not been penalised as severely as those in Lothian region and Dundee and Stirling district councils.
Great publicity has surrounded my right hon. Friend's proposals to reduce the rate support grant for Lothian by £47 million. The ruling Labour—perhaps I should say Socialist-Marxist—group is adamant that cuts cannot be found. It has consistently refused to meet my right hon. Friend to discuss the matter. I find that hard to credit when one takes account of the fact that the elected members of the Conservative group on the council, as was said by my hon. Friend the Member for Aberdeen, South (Mr. Sproat), proposed measures for reductions and savings amounting to £28 million which could be implemented with very little delay and without the compulsory loss of one job.
I shall not detain the House, because I know how many hon. Members wish to speak in the debate, but I wish to set out the Conservative group's proposals, as they were widely reported in the Scottish press and television and by several hon. Members today. However, an examination of those proposals shows what nonsense it is for the Labour group on Lothian—and also the other two councils—to maintain that there are no avenues for reductions in expenditure which would in any way go towards meeting my right hon. Friend's request.
I find it difficult to understand the sudden intervention of that political Marxist, Mr. Ken Livingstone, chairman of the Greater London Council. From a purely domestic disagreement involving the Secretary of State for Scotland and a few Scottish local authorities, we now have this political dictator from London pushing his nose in and saying that the Lothian fight is his fight. If we accept that statement, we must accept that it makes a farce of the outpourings that we have heard from Opposition Members about devolution for Scotland, should there ever be a Labour Government again, when even a regional local authority in Scotland is prepared to be dominated in its campaign by a London revolutionary.
With the experience that we have had so far of this red revolutionary—he organised the removal of the councillor who should have been the leader of the GLC on the Labour side because he was too much of a moderate—it would be a sad day for the people of Scotland if people such as Mr. Ken Livingstone were allowed to become involved in political matters, as he is attempting to become on this occasion. It says little for the Labour members of the Lothian regional group that they have allowed themselves to be conned by this new Left-winger of the GLC, who, in his office across the bridge, has one wall which he calls "Democracy wall", on which is stuck all his hate mail, along with all his cuttings from Private Eye.

Mr. Norman Hogg: On a point of order, Mr. Speaker. Are we discussing the Greater London Council, or the reports concerning the Lothian region and Stirling and Dundee district councils? Is it in order for the hon. Gentleman to refer to the Greater London Council?

Mr. Speaker: The hon. Gentleman is quite right. I became interested in what was being said about the London councillor, who appears to be involved in Lothian. If he was not involved, we must get back as quickly as possible to the reports and leave the subject of that interesting person.

Mr. McQuarrie: With great respect, Mr. Speaker, I am trying to get across to the House the farce of these reports being opposed by Opposition Members, when the campaign against the reports is being led by a red revolutionary from London, who is jumping on every bandwagon. Now he has even entered into the discussion on the H-block issue by interviewing the mother of one of the prisoners.

Mr. Speaker: Order. The hon. Gentleman is going beyond the bounds of Scotland.

Mr. McQuarrie: I conclude my remarks about Mr. Livingstone by saying that he has jumped on this bandwagon because he realises, and rightly—I say that because I am one of the people who are penalised by his actions in London—that if these reports are accepted there is a possibility that the same thing will happen in England because of overspending by people such as him. I have a message for Mr. Ken Livingstone: get off our patch and leave it to the many hon. Members on both sides of the House and local elected councillors in Scotland, who are competent enough to fight for Scottish interests without the intervention of a red revolutionary from London. We can look after our interests. Let him look after his. If the Lothian Labour group is stupid enough to fall for this man's devious actions, it is little wonder that the region is in the state that it is in today.
There is no doubt in my mind that these authorities, particularly Lothian, have set their minds against making any of the reductions requested by my right hon. Friend. If they wish to continue that attitude, the responsibility must lie wih them, and them alone. There are powers under the Local Government (Scotland) Act 1975, brought in by a Labour Government, for an application to be made to the Court of Session for the appointment of a judicial factor to take control of the local authority. If the authorities are not prepared to come into line with the other Scottish local authorities, the only course open to them will be to have judicial factors appointed, and at that stage the rebel councillors would lose all control of council affairs.
Although such a move would not be a happy one for either the Government or the local authority, it will be necessary if these councillors are determined to have a showdown with my right hon. Friend and the Government. The Opposition may huff and puff as much as they like about what will happen to this legislation if there is ever another Labour Government, but if they are to be a responsible Opposition they must accept that the law must be upheld, as the hon. Member for Inverness (Mr. Johnston) rightly said. No council, regardless of its size or political colour, can dictate policy to the Government of the day, who are responsible not only for ensuring that the law is carried out but for providing the money, to a large extent, which the local authorities are given to carry out their functions.
At the end of this debate, my right hon. Friend 's proposals will be carried with a substantial majority. The three local authorities which have already spent thousands of pounds of ratepayers' and taxpayers' money in attempting to defend their actions will be required to fall into line or face the consequences. I sincerely hope that they will see the light, rid themselves of the red revolutionary from the GLC, and reflect that my right hon. Friend's proposals are not only essential for the well-being of the local authority ratepayers whom they represent but for the country as a whole during the present difficult times.
After today's debate, the decision will rest with the local authorities. I only hope that they will have the grace to accept that what is being asked by my right hon. Friend is reasonable and that, having considered the debate in this House, they will decide that it is wiser to meet him now and save themselves dire consequences in the future. His terms are reasonable, and he is prepared to consider the matter in a reasonable light. Similarly, they should accept the fact that he is a reasonable man who will listen to any reasonable proposition that they put to him. Then there will be less of the hassle that we have had in this debate.

7 pm

Mr. Robin F. Cook: During the past two hours we have heard three speeches from Government Back Benchers. With all due respect to the hon. Gentlemen, in all three speeches they provided a parody of themselves. The speech of the hon. Member for Aberdeenshire, East (Mr. McQuarrie) was such a parody of his normal contributions that even he could not keep a straight face while he presented it to the House. The three hon. Gentlemen called for flexibility and reasonableness on the part of the councillors who are affected by these reports. All three spoke with contempt about the councillors. It is impossible to call for a flexible and reasonable attitude from both sides of the argument while speaking about one side with the shower of contempt that we have heard from the Government Benches.
I have served in local government, and have maintained close connections with it since my election to the House. Scotland is fortunate to have local authority representatives of high calibre and great dedication. It is, perhaps, surprising that Scotland has representatives of such calibre and dedication, given how little are the rewards and given the sacrifices that they have to make in their personal lives and careers. We have a better calibre and commitment from those representatives than we deserve in the light of the contempt poured upon them from the Conservative Benches. I hope that there will be discussions, should the


House be mistaken enough to pass the reports. They will take place in a more reasonable frame of mind if those councillors who have overheard what has been said from the Government Benches can set that aside.
We are debating three reports that spring from powers taken by the Government in the Local Government (Miscellaneous Provisions) (Scotland) Act 1981. I spoke last December on Second Reading, as did a number of my hon. Friends. I said that it was unwise for the House to grant the Government powers that were essentially arbitrary, open to arbitrary use and, in the nature of arbitrary powers, open to abuse.
The only Conservative Member who has come near to explaining why the three local authorities have been singled out was the hon. Member for Aberdeen, South (Mr. Sproat), who, in a moment of uncharacteristic candour, said that we were discussing a small group of Left-wing councils. That is so. That is why they have been selected, and that is why we are discussing them this evening.
Although many of us feared that the powers would be used in an arbitrary manner against those of whose political complexion the Government did not approve, I do not think that any of us feared that the Government would use them to the degree that they have. The Government say that no less than 22 per cent. of the budget of Lothian region between now and 31 March next year is, in the Government's words, "excessive and unreasonable". It is a curious concept that the Government can suddenly announce that they have discovered that no less than one-fifth of a local authority's expenditure is excessive and unreasonable. After all, that local authority is governed by statutes. The House passes those statutes. We pile obligations on local authorities. Governments shower out guidelines to assist local authorities to interpret their duties under the statutes.
The last Tory Government produced a positive avalanche of guidelines on how local authorities should interpret the Social Work (Scotland) Act 1968. Lothian region still under-provides on every one of the major guidelines. It is a measure of the extent to which the Tory Party has moved to the Right that an attempt by a local authority to make provision towards the guidelines issued by the last Tory Government as a decent minimum should be regarded by the present Tory Government as an excessive and unreasonable level of service.
We must look beyond our contribution to local authority spending in a corporate sense, as a House of Commons sitting in Parliament, to the contribution that we make as individuals campaigning on behalf of our constituents for higher expenditure in our constituencies. During the past three years Lothian region has provided eight new community centres. That is one reason why it has a high revenue expenditure. One centre is almost at the bottom of my garden. I take no credit for that provision because it is not in my constituency, but in the constituency of the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton). He can take credit for it because he led a campaign of local residents demanding the community centre at the foot of my garden. There was a time in 1978 when I could not go to my door without finding yet another leaflet from the hon. Gentleman assuring me that he was doing everything possible to provide me with a community centre. Conservative

Members cannot have it both ways. They cannot demand added provisions for their constituents and then run away from the revenue consequences.
Edinburgh is short on places in old folk's homes. It has less than half the number laid down in the last Tory Government guidelines. One home is constructed, but still needs to be equipped, staffed and opened. It is in Sighthill in the constituency of the Under-Secretary of State, the hon. Member for Edinburgh, Pentlands (Mr. Rifkind). If the report is passed, and if Lothian region is obliged to make the cuts sought in the report, that home cannot open. Even if we forget about the £47 million proposed in the report, had the budget proposed by the Conservative opposition in Lothian last week been accepted, it would not have been possible to open that home. That budget froze any recruitment of new staff, which would be essential to open the home. I do not believe that the Under-Secretary is prepared to return to his constituency and tell his constituents that the opening of that home is "excessive and unreasonable". I do not believe that he has yet grasped the enormity of the consequences of what he is demanding of Lothian region.
The very fact that the Government are so amazed at the redundancy consequences of what they are demanding demonstrates that they do not have the expertise on which to base the presumption that they, sitting at St. Andrews House with their civil servants around them, can determine for Lothian, Dundee, Stirling or any one of 65 local authorities what spending is excessive and unreasonable. The Secretary of State poured scorn on the idea of 15,000 redundancies. The arithmetic is simple and inescapable. It has not been arrived at by the Labour group. The arithmetic has been carried out by senior officials who are well qualified and with long experience in local authority affairs.
Sixty per cent. of all Lothian region's budget is spent on staffing. The remaining 40 per cent. contains elements that cannot be reduced. For example, 12 per cent. is loan charges. I do not suppose that the Government will suggest that Lothian region should default on its loan charges. It is an inescapable fact that a high proportion of the saving of 22 per cent. that the Government are seeking must be found from staffing costs.
The problem with achieving savings through staffing costs is that we are already three months into the financial year. It will require more than 100 redundancies to achieve even the savings talked about by the Conservatives in Lothian region. Once more than 100 redundancies are declared, three months' notice must be given to the Department of Employment so that it can mediate, although I do not know who it can mediate with in these circumstances. Even if, on 1 August, Lothian region issued redundancy notices, they cannot take effect until 1 November. After they take effect, there will have to be substantial redundancy payments. If the region is to make savings of the sum mentioned by the Secretary of State in the report on 1 November, it must declare redundancies of sufficient magnitude to generate those savings net of redundancy payments by 31 March 1982. If we do the arithmetical calculation, the figure to emerge is 15,000 redundancies.

Mr. Rifkind: If the hon. Gentleman has read the representations from Lothian region, he can confirm that the figure of 15,000 redundancies is based on the assumption that of the original figure of £53 million, £29


million would have to be saved from staff and £24 million by non-staff measures. Can he confirm that on the basis of those figures, on which he is placing such great reliance, Lothian will save at least £24 million before the question of staff comes into the operation?

Mr. Cook: The £24 million came out of the remaining 28 per cent.—that is, the 40 per cent. non-staff expenditure less the 12 per cent. loan charges. To achieve that £24 million, it will be necessary to halt maintenance and the purchase of supplies. It is true that that can be done in one year, but in the next year that sum must be recouped.
I turn to the Tory budget in the Lothian region, to which all Conservative Members have referred. It contains a provision to reduce highway maintenance from £2·6 million to £0·6 million. That removes £2 million from the highways maintenance programme. That will produce substantial redundancies in the small local businesses that depend on that expenditure—yet we are told that the Tory Government are in favour of such businesses. Secondly, it is not a saving. It is not an economy. It is not eliminating waste. It means, for example, that holes in the roads will be left unfilled. There will come a stage, either next year or the year after, when the holes will have to be filled or the roads will cease to be trustworthy. If that stage is reached, there will be even more expenditure than if the authority had maintained a reasonable programme of road maintenance.
It is clear that the Tory budget sets out not savings or economies. It contains some odd assumptions. The key assumption in the Tory package that was presented to the regional council, the one that would produce the greatest revenue, was that, if offered early retirement, one-third of all the Lothian region's employees over 50 years of age would opt for that, and would do so by 1 September to enable the Conservatives to get their calculations right. There is not a shred of justification for assuming that one in three of those over 50 would opt for early retirement even if it were on offer.
The Tories were not providing economies or savings. They were providing cuts in services such as highway maintenance. They suggested recouping £2.5 million by reducing the concessionary element in bus fares. That is not a saving or an economy. It means asking the elderly and the disabled to pay more for their bus fares. That is how one obtains more money by reducing concessions for fares. That is the consequence of the budget that they were proposing.
If the report is carried and if cuts of such magnitude are implemented, there will be a reduction in services. In reality the Government are arguing that it is not expenditure that is excessive and unreasonable but the level of services provided in the Lothian region. I am prepared to defend the level of service. The region now has 12 per cent. more children in further education than in 1978. That has resulted in increased education expenditure. I consider it to be a right and proper expansion. We now have more unemployed teenagers than ever before. It is exactly the time when we should be increasing educational opportunity. If the nation has any future, it lies in high technology industries. We shall not secure that future if we continue to under-invest in further education.
Since 1978 the region has increased the number of elderly persons receiving home help from 7,000 to 10,000.

I do not regard that as excessive and unreasonable. It is a proper and defensible increase. Indeed, the provision of home helps for 10,000 elderly people does not meet the need that exists in the region, which I know at first hand.
Irrespective of whether Conservative Members share my view that the level of service that I have described is not excessive but reasonable and right and proper, the question that they have to ask themselves is whether it is legitimate for the Government majority in the House of Commons to decide what the level of provision should be in the Lothian region. That is what we are debating.
The Secretary of State argued that all previous Governments had taken a view on local authority expenditure. That is true. It is also true that all previous Governments have used their rate support grant powers to try to influence the level of local authority expenditure. That right of the Government is not at issue. Governments raise the rate support grant and they pay it. Therefore, they have a right to decide the level of that grant. That right is not questioned by the Opposition. As I have said, it is a right that is not at issue. The Government have already reduced the RSG for the Lothian region. It is already receiving £20 million less in RSG than should be made available to it on any reasonable assumption. We are debating a separate and additional reduction of £47 million in the rate-borne expenditure of Lothian region.
If the electors of the Lothian region want a high level of service and are prepared to pay the high rates that are necessary to finance it, that is a matter for them. Some Conservative Members, including the Secretary of State, have suggested that it is necessary to place the reports before the House to protect the ratepayers. That claim is bogus. Within less than 10 months there will be elections in the Lothian region. The regional council will have to go to the electorate to defend the rate that has been struck on the basis of the services that it has provided. If the ratepayers are incensed by what has been happening and if they are not prepared to pay the rates, it will be open to them to turn out the regional council and to put in one of another hue. That is their right, and that decision should be left to them. It is that decision which the Government are seeking to take away from the electors of the regional council.

Mr. Henderson: I go along with the hon. Gentleman up to a point. However, is it not a fact that there are many electors who are not involved in rate paying?

Mr. Cook: It has never been argued in modern times that the payment of tax is a necessary precondition for having qualification for the electoral franchise. That idea was thrown out in the middle of the nineteenth century. Some of my hon. Friends who are historians will be able to tell me whether that happened in 1832 or 1868. It was at about that time that we managed to bring the Victorian Tory Party to accept the idea that those who did not pay taxes had a right to vote. I very much regret it if there are some backwoodsmen among Conservative Back Benchers who believe that what Disraeli did in the mid-nineteenth century was a mistake and that the universal franchise has been one big error.
Our political system is already highly centralised. It is rather more centralised than the political systems of many other countries. Local authorities are the only elected bodies outside Parliament. They are the only bodies that have a popular franchise other than the Government. That


is why I recoil with horror from the idea that is embodied in the reports that local authorities should be reduced to the same state of subservience to which the Government have reduced their Back Benchers. If we extinguish the independence of local authorities, we shall be removing the one independent check on the action of the Government.
What is at issue is the right of local communities to disagree with the policy obsessions of the Government and to elect a local authority which represents their own distinctive view and which rejects the policy that is being pursued by central Government, which is the democratic right of a local community. It is that right which is under attack in the reports. If we remove the democratic right of local communities to elect local authorities that resist the policy obsessions of central Government, we are reducing the only practical form of dissent to the street riot. A society in which only that form of dissent was permitted would be a less healthy society, a less efficient economy and a profoundly less pleasant place in which to live. I am not prepared to connive in a step towards that society and, therefore, I shall be voting against the reports.

Mr. Gordon Wilson: The hon. Member for Edinburgh, Central (Mr. Cook) has canvassed the principles that lie behind the reports. It is clear that they constitute an invasion of local democracy. They almost certainly represent an attack by the Treasury on the level of services in Scotland. If the reports are implemented, there will be a general contribution to be demanded from other local authorities to make up the shortfall, whatever that might be.
Even before we started the financial proceedings of this year and the negotiations on grants, Scottish local authorities were in the midst of a cash crisis. They had exceeded the spending targets set by the Government. Three factors had accounted for that excess. First, local authorities had started the financial year 1980–81 by approving budgets of £83 million in excess of the Government's guidelines. At that time Lothian, the Highlands and Fife were the main contributors to the excess among the regions, although cumulatively the districts' excesses contributed most to the sum. Altogether there was a 5 per cent. excess on the Government's total planned target for local authority spending within Scotland. Secondly, the Government's cash limits put an upper ceiling on the amount of rate support grant given to cover pay and price increases. Councillors found to their cost that that was inadequate to cover inflation. They also had to bear the costs of additional interest on loans, although that was a relatively minor figure compared to the overall cuts which had been made.
At that stage it seemed that local government was coming more and more under Treasury control. If the reports go through, just as the local authorities will become veritable puppets of central Government, so, in a way, the Scottish Office will be acting under the orders of the Chancellor of the Exchequer and Government economic strategy. That strategy has already been found to be at fault in relation to the general economy and our country's industry. Equally, it is begining to have adverse effects on the local authorities concerned.
One of the significant things in the documentation which has been produced to the House is the wide variation amongst the different local authorities. It is right that that should be so. Our system implies, by election of councillors, that they are entitled to take collective viewpoints in their areas of the needs and obligations of those districts. That is the essence of the system. If we did not give them the power to rate or to spend, and if we did not give them the duties to look after their people in terms of their electoral responsibilities, we might as well wipe them away and replace them with a system of prefects, as in France. Direct rule would take away what vestiges of democracy might exist at local level.
It is also significant that such is the compression and such are the twists of the tourniquet that a large proportion of the councils have found that they are unable to meet the guidelines. It is not as if the three councils which we are discussing, which are the leaders in respect of overspending, are the only ones which are affected. Throughout Scotland, in local authorities of differing political complexions, one finds that they have been unable to meet the guidelines which have been laid down. The right hon. Member for Glasgow, Craigton (Mr. Millan) was right to put it on record that at one time the guidelines were meant to be guidelines. Now we find that they are bars which seek to circumscribe the freedom of local authorities and to take from them the right to deal with their local affairs.
It is correct, as the hon. Member for Edinburgh, Central said, that the regional authority in particular will have to account to its electors come May of next year. Although the district councils will have to go for another two and three-quarter years before the elections, the principle at stake is the most important one—they are accountable to their electors. If they go berserk, do daft things and overspend wildly in certain directions, or if they cut back drastically and close old people's homes and so on, they in turn will have to be responsible to the electorate come the great day of judgment, whenever the elections are. The Government are doing a dangerous thing. In a way, they are trying to recast the whole of our local government structure to deal with an economic and monetary crisis of their own making. However, the legacy which they will leave behind will outlast the outcome of our deliberations today, or the crisis which has been generated and which will have to be answered for over the next two, three or four months.
Once those powers are taken and exercised, they will be used repeatedly by the Government. I know that the right hon. Member for Craigton has given a pledge to the House, which I welcome, that should his party be in Government next time round, it will repeal the Local Government (Miscellaneous Provisions) (Scotland) Act. However, what worries me is that, based on the precedents now established, some of them going back to 1966 and 1919 and quoted ad infinitum, something will take the place of the Local Government (Miscellaneous Provisions) (Scotland) Act, which will be no more palatable to those in local government.
The Government demand that council staffing in Scotland should be reduced by 10,000 this year. In April this year, Mr. William Fitzgerald, the president of COSLA and a Conservative councillor, said that it did not make sense to have people on the dole when they could be engaged in productive work. He warned that the effect of


the proposed reductions in the rate support grant would be to lower the level of services provided. Councillor Fitzgerald went on to claim that
The disaster I fear is that this generation of school leavers will carry with them throughout their lives a feeling of bitterness and hatred of society.
With the responsibility of his office, that was a lesson which the president of COSLA was right to read out to the Government and to the public.
In relation to the budgets which are under attack, it is not possible for me to deal with the budget for Stirling or Lothian. My vote and that of my right hon. Friend the Member for Western Isles (Mr. Stewart) will be cast on the question of principle.
I shall say a few words about Dundee district council. It has told me that its expenditure of £58·20 per head compared with the Scottish average of £57·40—those were the figures, not the £1 million mentioned by the hon. Member for Dundee, West (Mr. Ross). It said in particular that the needs and resources elements were too low. It directed my attention to the fact that central Government funding, which was cast on that basis some years ago when the industrial climate in Dundee was healthier than it is now, takes no account of either the needs of a city with an increasing level of deprivation or the reduction in resources. In any discussions which the Government have with the Dundee district council, they should take that point into account and they should also consider increases in the variation in the needs and resources elements in next year's figures. The economic rundown in the city is dangerous. The Government must take that into account in their calculations.
However, the 150 per cent. rates increase which was fixed by the Dundee district council this year takes a lot of swallowing. The hon. Member for Dundee, West prompted me to come along with my alternative budget, as if I were a district councillor in Dundee. I sometimes think that the hon. Member for Dundee, West regards himself here at Westminister as a district councillor, because when he talks of his council he acts as if he were a professional apologist for it instead of an independent critic, although he is, perhaps, sympathetic to its political background. He will have to learn that his duty as a Member of Parliament is wider than simply justifying his district council, right or wrong and whatever the consequences.

Mr. Lang: rose—

Mr. Allan Stewart: rose—

Mr. Wilson: I shall not give way. Not even the temptation of a call from Galloway would encourage me to do so. If such a call had come from the hon. Member for Dundee, West, that would have been another matter. However, I shall give way to the hon. Member for Renfrewshire, East (Mr. Stewart).

Mr. Allan Stewart: Accepting what the hon. Member says, nevertheless Members of Parliament are entitled to take an overall judgment. Does he or does he not support the total planned level of expenditure by Dundee district for this year—"Yes" or "No"?

Mr. Wilson: I do not know why the hon. Member is intervening, because I have already said that I do not approve of the overall budget, and I believe that it will have to be revised.
The 150 per cent. rates increase is something that will have to be established. In Dundee, even amongst people who voted for the Labour Party, there was considerable anger at the way in which the rates were increased. The Dundee district council Labour group has behaved with all the delicacy of a charging rhinoceros. In its every encounter so far with the Government, it has lost. It was the only council in default in Scotland over housing. It lost that battle after all its wild talk. It lost housing finance, part of which was attributable to the Government, but part of which was also attributable to its own actions. It is almost as if the council was able to touch gold and convert it into lead.

Mr. Lang: I have listened with great care to the hon. Gentleman, and I still find it difficult to establish where the SNP stands on the fundamental principle of the relationship between local government and central Government. He and I both know that the approach of the Labour Party is based on deeply held and strongly felt opportunism. Does the SNP propose that in an independent, separate Scotland the Parliament would allow local authorities to run riot through all national expenditure plans, or would it propose to legislate to control local authorities and thereafter to encourage them to conduct a campaign of civil disobedience?

Mr. Wilson: I shall deal with the question of central control a little later. I was merely indicating that in my view the district council played into the Government's hands and that it has lost sympathy with many ordinary citizens who regard it as spendthrift.
One of the council's problems, when it tries to make responsible points, is that it has a bad reputation. I have with me a copy of a letter that appeared in the Dundee Courier this month from Mr. George Gilmour of Balloch Place. It stated:
After reading with anger and amazement of the invitations to 44 Dundee district councillors and their partners to attend four days of feasting and merrymaking I think it is a downright liberty to expect the ratepayers to foot this bill, even if it is a civic festival.
He says that he was recently forced to join the dole queue, that he and his wife are now on social security and that they are still only 60 years of age. The end of his letter states:
I think it is about time the district council spent more of its time on solving the urgent problems and less time spending ratepayers' money on entertainment for themselves and their partners.
In response to another letter in the Dundee Courier, one district councillor was provoked into defending himself. On 11 July, a letter appeared under the heading "Absent", and stated:
Sir,—Re Mr. A. Dawson's letter, it might be as well to get the record straight.
Not all the 44 Dundee District Councillors are attending the 'junketing' and the writer of this letter is one who will be absent from every function.
There is nothing wrong with that, except that the letter was signed:
District councillor. Name and address supplied".
It is almost as if it is dangerous for a Dundee district councillor not to be associated with a waste of public money.
In another letter, Mrs. Ellenor Lynch of 35 Ellengowan Drive, Dundee, said:
As a dedicated and lifelong Socialist I find myself wondering if our present councillors are not following the works of Groucho instead of Karl.


Those are some of the comments in the local newspapers from people who might well be Labour voters. One of them was certainly a lifelong Socialist.
The hon. Member for Edinburgh, Central dealt well with the question of central control. There is a danger that local authorities are merely becoming local arms of a national bureaucracy and that they are playing a diminishing role. If there is a demise of local authorities, and if we become subject to central Government control, there is a real danger that we shall lose something that is of great value in Scotland.
I, too, pay tribute to the many local authorities, including Dundee district council, which have striven to deal with the fact that Government money has been cut to such an extent that they find it difficult to manage. The Government have put such authorities in an impossible situation.
The debate also raises the question of a local income tax as an alternative to rates, but that is another subject. The SNP does not accept the Tory mandate to implement these cuts. Local authorities should save waste and give good value for money. However, as the hon. Member for Edinburgh, Central said, they should also provide the services that are required by the general public.
The Government have done themselves or Scotland no good by the measures now before us. We do not accept their mandate—we hope that the Labour Opposition also will not accept it—to rule Scotland.

Mr. Bill Walker: As a member of a party that put up so few candidates during the local government elections, and which has so few councillors, it speaks ill of the hon. Member for Dundee, East (Mr. Wilson) to put forward the policies to which he referred.
The hon. Gentleman referred to Councillor Fitzgerald, the convener of Tayside region. I trust that the hon. Gentleman will agree that Councillor Fitzgerald has always supported the Government's policies, as has the ruling party in the Tayside region. Therefore, to quote Councillor Fitzgerald out of context does neither Councillor Fitzgerald nor the hon. Gentleman any good.
The hon. Member for Edinburgh, Central (Mr. Cook) referred to Acts on the statute book that required local authorities to carry out statutory duties. He was right to draw attention to that fact. One of the sadnesses of this place is that we fondly imagine that we can put legislation on the statute book and leave others to carry it out without willing the means to do so.
After the war, successive Governments did just that. They put Acts on the statute book based on growth that did not materialise. The crunch came when the former Chancellor of the Exchequer, the right hon. Member for Leeds, East (Mr. Healey), had to go to the IMF to get it to bail us out. That was followed by the actions of the right hon. Member for Glasgow, Craigton (Mr. Millan), who demanded substantial reductions from Scottish local authorities.
At that time, no effort was made by the Labour Government to change the Acts on the statute book in order to reduce the burden on local authorities, yet that was the only honest course available to them. I hope that the present Government will seriously consider Acts that are

on the statute book and bear in mind that at present they do not will the means by which the burdens imposed by those Acts can be carried out. It is dishonest to do otherwise. For example, the Social Work (Scotland) Act was on the statute book when the Labour Government were in office, yet they made no attempt to amend it, knowing full well that Lothian and other regions would have difficulty meeting their statutory requirements because of the reductions demanded by the right hon. Member for Craigton.
My interest in the debate centres around the report relating to the Dundee district. I and my hon. Friend the Member for South Angus (Mr. Fraser) have constituency interests, and I am sure that my hon. Friend will speak later about his. I merely draw attention to the fact that more than 2,000 of my electors—5,000 individuals in all—live in the Dundee district. I therefore believe that I have a real and genuine constituency interest.
We hear so much about local democracy that it is interesting to look at the results of the last district council elections in Dundee. They show that my hon. Friend the Member for South Angus and myself represent 11 per cent. of the electorate of that district. The Labour council was elected by 26 per cent. of the electorate. The opposition parties polled 22 per cent. of the votes, but 52 per cent. of the electorate did not vote. Therefore, based on 4 per cent. of the electorate, the Labour council claims a massive mandate to increase the rates by 150 per cent.

Mr. Ernie Ross: I am sure the hon. Gentleman accepts that, if people are not prepared to get off their backsides and vote, they can hardly claim later that they intended to vote one way or the other. He will also be aware that Dundee district council received the highest vote of any local authority at the last district council election.

Mr. Walker: The hon. Gentleman has just made the point that I was about to make. The sadness of it is that we come here and talk about local authority mandates when the majority of the people living in the constituencies, the districts or the regions do not bother to vote. There must be something very wrong with the way in which we run our affairs if the majority of the people, to use the hon. Gentleman's phrase, are not prepared to get off their backsides. I find that very disturbing.
The Opposition also keep saying that local authorities in Scotland have a mandate to speak on behalf of the people of Scotland. As has been clearly shown, it is a pretty thin mandate. They keep telling us that the Government should call for a fresh mandate. They say that we should go to the people because we do not have the support of the people. Is the hon. Member for Dundee, West (Mr. Ross), for example, asking Dundee district council to call for a fresh mandate on the same hypothesis? Why is it right for the Government to go for a fresh mandate but not for Dundee district? I doubt whether those councillors would be re-elected with a mandate on the basis of a 150 per cent. increase in rates.
I turn to the response of Dundee district council to the reports. I draw attention to its comments on the level of rates levied and the reason behind it. Referring to the local authority, it says:
Now the whole structure is in danger of collapse due to the determination of the Government to impose cuts at all costs—including the cost of sweeping away the last remnants of local autonomy.
I draw the attention of the hon. Member for Dundee, West to the fact that Dundee, West and Perth and East Perthshire


share one council, but I have another council, too—Perth and Kinross district council. The degree of independence that we talk about and which is claimed to be at risk is certainly not viewed in that way by the councillors of Perth and Kinross. Indeed, I can think of no more independent group of councillors, both collectively and individually, than those of Perth and Kinross. They were certainly not puppets of the Government, either before or after the Act under which these reports are laid. They are independent and they do not see anything that is happening as affecting that independence.
Members of all parties, I think, would agree that the most critical issue facing Dundee is the problem of jobs in the city. The hon. Member for Dundee, West referred to this, and I certainly agree with him that this problem concerns us all and something must be done about it. I hope that he will agree with me, however, that savage increases in rates may deter firms from coming to the district and, indeed, destroy existing jobs.
Given its geographical location on the Tay estuary, Dundee should be in a unique position to exploit the boom in mainstream and downstream oil-related jobs. It also has additional advantages over other places. For example, a six-apartment house in Dundee would cost about £45,000. In Aberdeen, it would cost more than £60,000. A five-apartment, three-bedroomed villa in Dundee would cost £32,000, whereas in Aberdeen it would be about £42,000. The cost of residential land in Aberdeen is about £60,000 per acre compared with about £25,000 per acre in Dundee.
Dundee therefore has built-in geographical and cost advantages. Why has it been unable to exploit them? Could there be something wrong with the image projected by the city as a result, for example, of the 150 per cent. increase in rates?

Mr. William McKelvey: Could it be that there was a Conservative council in Dundee during the relevant period? The oil boom is not new. It has been going on for some time. Indeed, a recent SDA report suggests that Dundee has missed the boat with regard to oil and that it is now too late. The hon. Gentleman cannot blame that on a 150 per cent. rise in rates.

Mr. Walker: I thank the hon. Gentleman for his intervention. It is surprising how often Opposition Members are just a little ahead of me. I was about to refer to successive councils in Dundee.
Interestingly, the previous council attempted to redress the balance by reducing the rates. Previous Labour administrations, sadly—I did not wish to refer to this, but the hon. Gentleman leaves me no option—in the key years for the oil boom reflected a shocking image which those of us who are Dundonians would not wish to remember. I give credit to Labour Members for the fact that they took no part in that and are determined to erase that memory, but we must acknowledge that it is there. That is the problem which faced the citizens of Dundee in trying to bring jobs to Dundee. I therefore repeat that it was the cavalier attitude of the local authority towards rates and expenditure, because that relates also to the previous Labour administration.
Could the problem be, for example, the rather naive and silly way in which the council goes about employing people such as research assistants to provide the local ruling group with Left-wing material at the ratepayers' expense? That is hardly a clever way to put out an image of an authority which cares.

Mr. Ernie Ross: rose—

Mr. Walker: Could it be the trips to Nablus, again on the charge of the ratepayers? All of those things affect the image of the town.

Mr. Ross: rose—

Mr. Walker: When one links that with the attitude of the authority to the rule of law, one must surely acknowledge that a difficult situation is being made more difficult by an authority which does not understand that its image is important and the way that it acts is important. If it does not agree with the Government of the day, it should act responsibly and acknowledge and believe, as Labour Members keep telling us, that one of these days an alternative Government will come to office and will remove this hideous legislation. That is the correct and proper way to behave.
The Government and the Secretary of State have adopted a reasonable posture. They have told the local authority that they are prepared to have discussions with it. Dundee district council argues in its paper that the problem is due to local changes. People have been leaving for a variety of reasons, but services have to be maintained. It also argues that there are problems locally. No one would deny that. Nevertheless, if one examines that council's record and performance as compared with the other authority in which I have an interest, Perth and Kinross, it comes out extremely badly.
Let us consider the situation with regard to the over-65 age group, which calls for additional expenditure and caring. In Dundee district, the proportion of over-65s in the population in 1977 was 14·4 per cent. In Perth and Kinross it was 16·3 per cent. In 1978, the proportion was 14·7 per cent. in Dundee and 16·5 per cent. in Perth and Kinross. In 1980, it was 15 per cent. in Dundee and 16·4 per cent. in Perth and Kinross. I draw attention to this because we must acknowledge that the swingeing increase in rates in Dundee will affect an already difficult situation.
The major employer in Dundee in the service sector is the Tayside regional council, with 16,000 employees. Every penny that Dundee district puts on the rates costs the region £52,000. The Tayside health board has 11,000 employees. It, too, is affected. Government Departments have 1,000 employees. The Post Office has 1,500. The list is endless. They are all faced with swingeing increases in their rates, because every penny that is put on the rates has to be paid for.
Let us consider what is happening in Perth and Kinross district. The largest employer is the General Accident Fire and Life Assurance Corporation, which is currently building a massive new office block in Perth. It employs approximately 5 per cent. of the population. Would it have done this if its rates had gone up by 150 per cent.? Of course not. Nor would Bells, Peter Thompson and Spirax Binding have expanded. That is one of the reasons why draw attention to the fact—

Mr. Ernie Ross: rose—

Mr. Walker: I have already given way to the hon. Member and he has made his speech.
My constituents care very much about jobs and about the future prospects for their children, and they want it to be noted in this House that the swingeing increases that Dundee district is proposing are damaging to the prospects of the city and to the people living there.
Labour Members frequently claim that the Government are doctrinaire and that they are monetarists. Yet the Government have spent more money in real terms than the previous Labour Administration spent. Were the Labour Administration monetarists? If Dundee district had been prepared to enter into meaningful discussions and negotiations with my right hon. and hon. Friends, I am sure that we could look forward to something coming out of them.
I said in a previous debate in the House that I do not believe that everything that Dundee district does is bad. It is not, and it would be nonsense to pretend that it is. But there are areas in which it is open to criticism, and it is part of the job of a Member of Parliament representing constituents in the district to make sure that the criticisms are debated in this place at the appropriate time.
If the Dundee district Labour group is prepared to enter into meaningful discussions and to look at how reductions in expenditure can be achieved, through natural wastage, earlier retirement and modifications in recruitment policy, I believe that the Secretary of State will move nearer towards a solution of the problem on a mutually agreed basis, which is essential.
I remind hon. Members that Perth and Kinross district increased its rate by 12.5 per cent. in 1979–80, by 16·5 per cent. in 1980–81, and by 14·2 per cent. in 1981–82. If Dundee district council had done exactly the same, the debate would not have been necessary. No one has suggested that Perth and Kinross is not providing services.

Mr. McKelvey: On a point of order, Mr. Deputy Speaker. Is it in order for the hon. Member continually to refer to Perth and East Perthshire when there are no proposals and are not likely to be any proposals in regard to clawback in its general expenses?

Mr. Deputy Speaker: (Mr. Ernest Armstrong): The hon. Member for Perth and East Perthshire (Mr. Walker) may refer to Perth in relation to the reports.

Mr. Walker: Thank you, Mr. Deputy Speaker. It is a typical ploy of the Left to stifle any comment that shows up the failings and weaknesses of its case. The hon. Gentleman does his cause a disservice. I have listened to him in the past, and I believe that he can make his points without endeavouring to stifle honest debate and discussion.
Between 1978–79 and 1981–82, expenditure per capita in Dundee rose. Let us compare that with the average in other districts, which comes out at about 10·2 per cent. That puts the spending proposed in Dundee into perspective. I am confident that the difference can be reduced, given good will. If the authority will stop pretending that it is going into battle against the Government, carrying the flag on behalf of the downtrodden Left, I am confident that we can get a sane and rational answer.
I hope that Dundee district will follow the example of Tayside region and Perth and Kinross district council, both Conservative-controlled councils, which co-operated with the right hon. Member for Craigton when he demanded reductions. There was no question then of these allegedly belligerent authorities demanding something different. They co-operated because they recognised that it was in the nation's interest to do so. The two councils showed by

their co-operation and by the reduction in their expenditure that it can still be achieved and should be achieved. Dundee district should follow these councils and co-operate with the Secretary of State, even if he is of a different political party, for the benefit of Dundee and for the benefit of Scotland.

Mr. Deputy Speaker: I reiterate what Mr. Speaker said earlier about brief speeches. We have had just over four hours of debate, with 11 speakers. Twelve hon. Members are trying to catch my eye, and the debate must finish at 10 pm.

Mr. Hugh D. Brown: I thought that that was one of the more reasonable speeches of the hon. Member for Perth and East Perthshire (Mr. Walker). At least there was occasionally an attempt to get some kind of understanding beween the authority and the Government. For that reason I welcome his speech and regard it as a change. I shall not comment on some of the other speeches by Conservative Members because I have heard them all before.
We have had some well-documented and interesting constituency speeches from some of my hon. Friends. I am sorry that the hon. Member for Dundee, East (Mr. Wilson) has gone. I could not fathom what he was trying to get at. I am a tolerant and sympathetic person. Any party that has Jim Sillars in it needs a bit of sympathy and understanding. As the SNP is hardly likely to form the next Government, we do not need to pay much attention to it.
I make no apology for widening the debate, in the sense of taking it into the Scottish context, because the debate is not only about Lothian, Dundee or Stirling, and none of my hon. Friends would dispute that. It even involves the Greater London Council and some of the English authorities. Hon. Members will not be surprised, therefore, if I make some general comments about attitudes rather than about the detailed case that has already been made by some of my colleagues.
It is a sad day for Scotland, with the announcement of the highest unemployment figures on record. It is also a sad day for local government that we are in this kind of impasse or faced with this confrontation. It is not healthy for local democracy or parliamentary democracy. Therefore, I want to see whether there is a way out of the impasse into which the Government have got themselves.
I do not believe in the gimmicky politics of my hon. Friend the Member for Edinburgh, Leith (Mr. Brown). In case anyone thinks that I am being too personal, may I say that it dawned on me, when I saw the Secretary of State for the Environment, that if ever a man would be totally incapable of getting a response from English local authorities on the problems facing the communities, it is someone who himself has been so disgraceful in his conduct in this House. How anyone—whether it is my hon. Friend the Member for Leith or the Secretary of State for the Environment—can possibly have the brass neck to go to local authorities and try to calm down rioters or riotous situations is beyond me. Even in the difficult situation in which Scottish local government finds itself, I hope that there is room for tolerance, understanding and compromise.
In the past two years we have warned the Government. I shall refresh memories of the Secretary of State and the Minister. The Labour Party lost the general election. That


led to frustrations and to problems within the Labour Party. Some o:' those problems and frustrations are well documented. It would be wrong to deny that there is a new political situation as new attitudes have developed within the trade union movement, the Labour movement and local government. The Labour Party lost the election. The people of Scotland were frustrated because we lost the argument about devolution. I am not arguing only about the 40 per cent. provision. Indeed, I thought that the 40 per cent. provision should never have been included. Equally, it was disappointing that we could not get 40 per cent. of the people to support a major constitutional change. That also led to frustration and discontent on the political scene.
I have regularly warned the Government that there are many new members on local authorities. I do not wish to be patronising, but they have not been in local government long and they have not held power for long. As we all know, power corrupts. It should be treasured and guarded, especially when people are new to it. We have warned the Government that they are dealing with Labour-controlled local authorities that are more political than ever before. I am not speaking about some plot by the Militant Tendency. There has been a healthy raising of political consciousness on the part of those active in political life. The Government must take that into account in their dealings with local authorities.
I do not understand how it is possible to justify spending public money on youth opportunities schemes and so on when the job could be done by local authorities. I was a member of a Government who did that. I could never understand the economic justification for it. On the one hand, local authorities are told that they cannot spend money on cutting grass in old folk's gardens but, on the other, that if kids go down the road to the Manpower Services Commission office they will be given the money to do that job. I cannot understand the economic or financial logic of such policies. Again, that has frustrated elected local government members.
The Government introduced three Bills for Scotland. I refer to the Tenants' Rights, Etc. (Scotland) Bill, the Education (Scotland) Bill and the Local Government (Miscellaneous Provisions) (Scotland) Bill, which has led to these orders. The Government did not make one concession on the Tenants' Rights, Etc. (Scotland) Bill although some of us begged them to make concessions and not to adopt such a hard-line approach. Whatever else that Bill may have meant for tenants, it was a vicious attack on the rights and responsibilities of local government. The Government can make a case for the Act, but they should not let themselves be deceived into believing that it is not an attack on local government and the rights of locally elected representatives to make decisions in the interests of their electors. The Government must take some responsibility for what they see as the current intransigence and difficulties.
Again, the Government wrote rights into the Education (Scotland) Bill that will conflict with those of locally elected education authorities. There can be no question of that. In addition, we warned the Government that they were seeking trouble in the provisions of the Local Government (Miscellaneous Provisions) (Scotland) Bill. Of course, both sides must be reasonable. An authority must be reasonable and accept the rule of Parliament. The

Government must be reasonable and must accept the independence—as far as that is practicable and possible—of local government.
The Secretary of State is normally reasonable. I beg him to accept that he has pursued policies that have played into the hands of some colleagues in local government who wish to take on the Government. That is not healthy. I do not say that because the Labour Party may come into office. Some colleagues in local government would take a Labour Government on as well. However, that is not healthy. No doubt, I shall not be involved in the next Labour Government—[HON. MEMBERS: "Why not?"] If, by popular demand, I was pressured into taking a job, I might consider it.
I plead with the Secretary of State to bear in mind that by introducing the three reports he is making it difficult to achieve a balanced and reasonable relationship between the local authorities and the Government. I am not saying that this is all the fault of the Government or of Lothian region. One would think, having listened to the hon. Member for Southend, East (Mr. Taylor), that that was the only thing that he could talk about. It is not all the fault of local government. I appeal to the Secretary of State to be reasonable.
Local government is good. It is much more efficient and effective than it has ever been before. Even the documentation received from the three authorities proves that point. That point is highlighted by a submission made by Stirling authority. It states that no two authorities "are exactly alike". That is a most profound statement. The Secretary of State looks a wee bit pained, as if he did not agree. He travels round the country and must know that no two authorities are alike in their rateable value, their size, the size of their respective populations or in the way that councillors approach the problem.
Even those with slide rules in New St. Andrew's House find it almost impossible to make accurate comparisons. The Government tried to write into local government: legislation the ability to make comparisons. They tried to produce criteria to meet that point. However, that is extremely difficult to do. Stirling highlighted a self-evident fact that no two authorities are alike and that it is difficult to make comparisons.
In Stirling the population is increasing as new people come into the area. However, it is almost regarded as a crime if a local authority tries to meet a demand, to improve a service or to create a new one. Is that now a crime? Of course, it is not. I am told that the Secretary of State for Scotland is a ratepayer in Stirling district council. He must know that a Labour Government face a different problem. Labour Governments do not have to chastise Tory councils for spending too much. Tory councils have never provided the services. Argyll and Bute are good examples. What has Argyll county council been doing for the last 20-odd years? Why has it not built some of the schools and houses that are demanded from a Labour Government? The relationship between local authorities and central Government is different when a Labour Government are in power.

Mr. Younger: The hon. Gentleman is right. It is different. It was particularly different when his right hon. Friend asked local authorities in 1976 to be economical and to make reductions and received warm and helpful support from the Conservative authorities and outright opposition from many Labour authorities.

Mr. Brown: As a general rule, Conservative local authorities do not spend as much in providing services as Labour-controlled authorities. I think that Conservative Members will recognise that I make a fair point. There is not, therefore, the same possibility for confrontation or conflict as exists when there is a Tory Government with no mandate from the people of Scotland. That is a factor that must be taken into account. There is a greater possibility of confrontation between a Conservative Government and big and powerful—they are bigger and more powerful than in the past—local authorities under Labour control. It is not the case that people are deliberately seeking confrontation. It is simply easier to get into that kind of situation.
The Secretary of State has said, I understand, that even if the reports are approved tonight, he is willing to talk and to continue talking. That must be reasonable. I am not saying whether a week, a fortnight or a month should be allowed for talks. No one in politics likes to be humiliated in public. That is the case whether it is the Government, Lothian, Dundee or Stirling. However, once the right hon. Gentleman acquires this power he must act reasonably and hope that people will come together to thrash out the problem.
Some of my hon. Friends, including, I am sure, my hon. Friend the Member for Edinburgh, East (Mr. Strang), will, if called to speak, be stressing the difficulty of even expecting Lothian to implement cuts of the size demanded at this stage in the financial year. There are practical as well as political problems. I beg the Secretary of State to be reasonable. It might be seen as rubbing salt in the wound if he insists that Labour-controlled authorities be obliged to make payments back to ratepayers. That is a clever, well-thought-out ploy. I hope that the right hon. Gentleman will be reasonable. I hope that he will not rub salt in the wound by insisting on these payments as a precondition to talks. I am glad to see that the right hon. Gentleman shakes his head.
I have no responsibility, nor am I speaking for any authority. I merely indicate that the House is in the last stages of the parliamentary Session.
If the Secretary of State wants to act against other authorities, he will have to do that before next week or not at all. If he does not, it would seem unfair to single out the three authorities we are discussing in advance of others. I think that the right hon. Gentleman will take the point.
I am not deploying this argument as a device or tactic for avoiding talks. I am merely asking the Government for an indication of whether they are willing to act reasonably, not just with Lothian, Dundee and Stirling, whose cases have effectively been put in this debate, but with the other authorities on the right hon. Gentleman's hit list. It would be a sad day for local government if the right hon. Gentleman was unreasonable. I hope that he will proceed along the lines that I have suggested.

Mr. Barry Henderson: I listened with great interest to the remarks of the hon. Member for Glasgow, Provan (Mr. Brown). The whole House recognises his sincerity and considerable experience in the matters that we are discussing. I hope that I shall do the hon. Gentleman no harm by saying that if the voice of the Labour Party that emerged at this time were his voice, it would be a much more dangerous opponent. The hon.

Gentleman is right to have drawn attention to the importance of the issue for other local authorities apart from the three concerned with the reports before the House.
The general taxpayer, and, therefore, Parliament and central Government, have a particular responsibility. They pay an average £2 out of every £3 spent by local authorities in Scotland. That being so, neither the Government nor Parliament can ignore the way in which that money is spent. There is a duty to control the totality of Government expenditure. I was interested to hear the hon. Member for Edinburgh, Central (Mr. Cook) accept the point that there is an undoubted duty and a responsibility upon the House to be concerned with the totality of expenditure. That is the first reason why it is appropriate that the Secretary of State has brought forward these reports.
Equally important is the fact that many people are affected by the high rates increases introduced by some local authorities which do not have an opportunity directly to change the pattern of local government which gave rise to those high rates. It is the duty of the House to concern itself with the interests of all sections of the community, not least minority interests. At a time of what amounts not merely to arguably large and worrying rate increases but to inconceivable increases, compared with past years, in the level of rates, introduced largely for political rather than for rational local government reasons, the Government have a duty to protect those who may be severely affected.
I have a particular reason for supporting and welcoming most warmly what my right hon. Friend has placed before the House. The total sum available from the central taxpayer to support local government is limited. That is accepted. If a few local authorities scoop out of the central purse of available resources a wholly unreasonable amount, it follows, by definition, that there are fewer resources available for those who have been thrifty. If such a tendency is allowed to continue, it must be inevitable that no one will remain thrifty for long.
Many local authorities, including some Labour-controlled local authorities, have, over the years, exercised reasonable discretion in their expenditure. They see years of care and concern in their expenditure being eaten away from total available resources as a result of the actions of a few local authorities. It is for that reason above all that I warmly commend my right hon. Friend for bringing the three reports before the House. We are not concerned in the reports with a marginally greater amount of expenditure by these authorities than one could consider reasonable. One sees at one end of the Tay bridge the vast increase in rates proposed in Dundee. Many of my constituents work and pay rates there. At the other end of the bridge in north-east Fife there was no increase in rates, and that contrast cannot be explained by saying that it is all the Government's fault.
There is no doubt that substantial political reasons and a deliberate attempt to take on the constitutional position of Parliament and the Government in relation to local authorities are behind the vast increased expenditure by a few local authorities. My right hon. Friend was right to bring the reports before the House. I hope that they will be warmly approved, and that we shall make it clear that a few will not rob the many.

Mr. Gavin Strang: I shall be brief, to enable as many of my hon. Friends as possible to take part in the debate. I preface my remarks by making it clear that Lothian regional council was right to send a deputation to the House today, and I am glad that the hon. Member for Inverness (Mr. Johnston) made that point.
It is to the council's credit that it has put its case so assiduously in recent weeks, and it would have been a mistake for its representatives not to have been here for the debate, given the extent to which it concerns the position of the council. If Scottish Conservative Members were waiting to meet representatives of the council, there must have been a misunderstanding. The delegation wanted to meet Conservative Members and it regrets any misunderstanding.
Far from putting the council in the dock, we should be commending it as an example of what can be achieved in local government. I am proud of the educational provision of the council, through its nursery school provision and the high standards that we seek to achieve in our schools.
Lothian also has a public transport system which is an example to the rest of Britain. It is one of only two systems in the United Kingdom that are increasing the number of passengers using them. The concessionary fares scheme for old people is an example that should be followed by other councils throughout the land, and the council's general level of provision for the elderly, while falling short of what we should like to achieve, is, nevertheless, a significant advance on what has been achieved elsewhere. That is what local government is all about, and we should not lose sight of that during the debate.
The Lothian regional council has a mandate for its policies. They were worked out with the Labour Party and it is to the credit of the council that they are being implemented. It is remarkable that the Secretary of State can assert that the reports do not threaten local democracy. They strike at the heart of democracy. How can the right hon. Gentleman defend the situation in the Lothian region?
When the council met to fix its expenditure for the current year, it knew what the rate support grant was to be. Whatever decision it took on the level of expenditure, and thus on the level of rates, had no influence on the amount of Government money being paid to the council this year. The Government are making a straightforward attempt to destroy the council's right to determine its level of expenditure and the level of its services in its area. That is why it is such a big issue and why the regional council has been supported by so many other councils throughout the country. We are witnessing a fundamental attack on the principle of local democracy.
I wish particularly to address myself to the effect of the cut that the Government seem to have in mind. I have repeatedly challenged the Secretary of State and the Under-Secretary during Scottish questions and in the Scottish Grand Committee to spell out what they expect to be the effect of a cut of £53 million or, as it is now, of £47 million.
The Secretary of State at least gave some acknowledgment earlier that the Government's figure could be achieved only with some redundancies. It is not good enough for the Government to duck that issue. There is no way that the council can make such cuts without making thousands of its staff redundant.
During Scottish questions last week, the Under-Secretary told his hon. Friend the Member for Aberdeen, South (Mr. Sproat):
My hon. Friend is correct. 1 understand that the Conservative group on the Lothian district council announced this morning that, after discussions with the officials of the Lothian region, it can identify savings of £28 million that could be made without any compulsory job redundancies and without any effect on vital services."—[Official Report, 15 July 1981; Vol. 8, c. 1163.]
I should make it clear that £2 million of the net savings that the Conservatives have suggested in public transport will affect only next year's expenditure. Much more important, and this point does not seen to have been fully grasped, far from those proposals being based on official advice, they have been specifically rejected by council officials who have said that it would be impossible to achieve the savings spelt out by the Conservative group without making workers redundant. The Conservatives have also inflated the figure for natural wastage at a time of severe unemployment. They claim that one-third of the staff over 50 would take voluntary early retirement on the spot.
The Conservatives propose savings of £25 million, but the Secretary of State has been talking of cuts of £53 million and £47 million. There is no way that the council could make such cuts without making thousands—and emphasise "thousands"—of public service workers in the region redundant in the current year.
There is a responsibility on the Under-Secretary to address himself to that issue when he replies to the debate. What will £47 million of cuts mean in terms of job losses? Of course, one could make some cuts and save some money without a direct effect on employment within the council, although it would have a severe effect on employment in the firms that supply the council. But it is not good enough for the Government to fail to address themselves to that issue.
The Government are opposed to public provision in all its forms. They are cutting the Civil Service, selling profitable parts of nationalised industries and encouraging private health at the expense of the NHS, and private education at the expense of the State system. It is pan: of their ideology. But they were elected on a manifesto which argued that if they made cuts, held the money supply, cut the level of Government expenditure in the economy and cut public expenditure the forces of private enterprise would be unleashed and would create new jobs and new investment.
Surely, after two years few Conservative Members still believe that. We are in a spiral of decline and the only way that it can be reversed is by more public expenditure through the nationalised industries, public agencies and local government. Far from cutting money from the local authorities, as the Government have been doing on an enormous scale, they should be reversing their policies to put more money into local government, thereby creating more employment in valuable community provision. That is why the House should reject the reports.

Mr. Peter Fraser: Although we have been debating the reports for about four and a half hours, it cannot be stressed too often that the approach of my right hon. Friend the Secretary of State for Scotland—although it may be faster, more direct, more immediate and more effective in the current year of the increases in


expenditure—represents no essential departure from the idea that it is legitimate for the Government to concern themselves with local government expenditure.
The right hon. Member for Glasgow, Craigton (Mr. Millan) might grumble from the Front Bench. I know that it is a recurrent nightmare for him to have to think again about 1977, but he knows that it was legitimate for him at that time, as a member of the Labour Cabinet, to examine what was being spent by local authorities in Scotland. It is a grotesque distortion to suggest that it is anything other than that. The only reason why that principle is not being acknowledged by the Labour Party is that the Labour Front Bench appreciates that if it were to acknowledge that it would find itself in conflict with most of the local authority majorities in Scotland and, not least, the chairman of the Labour Party in Scotland.
I regret that the hon. Gentleman is not here, because I intend to direct my attention to the Dundee district, but the hon. Member for Dundee, East (Mr. Wilson) stated that on principle he would vote against the reports and, having said that, he set about Dundee district council and without being too specific suggested that the rates increase imposed was excessive.
The hon. Member for Dundee, East uses principles like a fence. They are something that he can sit on and avoid having to take political responsibility for anything. He should remember that principles, like fences, have points and one of these days he will be well and truly impaled on one of them.
What is so utterly bewildering about the point advanced by Dundee district council is that it is unclear what exception it takes to the report being laid against it. Listening to the representations that were made to my right hon. Friend the Secretary of State and to the speech of the hon. Member for Dundee, West (Mr. Ross), one would think that the Scottish Office had made a ghastly mistake, that it had failed to understand the financial problems of Dundee and that Dundee had behaved totally reasonably; if one made comparisons with other local authorities in Scotland, Dundee had not diverged very far from the norm.
At one time that seemed to be the line of approach. On the other hand, the chairman of the Labour Party in Scotland, Mr. George Galloway, the hon. Member for Dundee, West and the Labour administration on Dundee district council have repeatedly claimed that what they are doing represents the new radical revolutionary seizing of the Socialist initiative in Scotland. They are picking up the banner of Socialism in Scotland that the ageing and fading members of the Front Bench and elsewhere in the Labour Party have let slip from their grip.
What is the argument about? If Dundee district council is claiming that what it is doing proudly is correct yet is doing it as a matter of political principle and in direct confrontation with the Government, let us be clear about it. That is what I have heard in Dundee.
On the other hand, the document that was put to the Secretary of State suggests, in a pseudo reasonable fashion, that he does not understand what is going on. When my right hon. Friend the Secretary of State mentioned that the rates increase in Dundee had been 150 per cent., I thought I heard the hon. Member for Dundee, East say "Highly commendable". If that increase is highly commendable, that is picking up the banner of the new

Socialist initiative. That is the one argument that we hear repeatedly. We hear claims and see the documentation that is introduced that there is nothing extraordinary in what Dundee is doing by comparison.
If Dundee district council wants to advance that case to my right hon. Friend, the simple test is that the council, instead of making comparisons with other district councils, should look back to what earlier Tory administrations did. The council is saying that the Tory administration would, if it had been successful in the local elections, have had to maintain the comparable levels of services that it had previously offered. It has not attempted to make that argument. If the Dundee district council could prove by that device that a 150 per cent., 130 per cent. or 100 per cent. increase in rates was necessary, a different complexion might have been put on the argument. However, the council did not do that, nor could it.
In the document to the Secretary of State for Scotland, the council claimed that as a direct result of the original requirement that £2.75 million should come off its expenditure about 900 jobs would be lost. The sum involved is now £2 million, and the council claims that with the reduction of £75,000 only 500 jobs will be lost. The council has in its time employed only 160 people in addition to those employed by the previous Tory administration. It is demonstrable nonsense to say that if a reduction of £2 million has to be made staffing levels must be reduced by 500 when the total increase in jobs is only about 160. The reduction from 900 to 500 is out of a total staff complement of about 3,000.
It is reasonable to conclude that, far from its being a simple problem of the Secretary of State and his officials failing to understand the problems, Dundee has set out to make a deliberate political gesture. Its political motivation is the same as that of the Lothian region. The Dundee council is determined to disrupt the Government's economic strategy. If that is the intention, the council cannot now be surprised that the Secretary of State has decided to respond.
However, if the council claims that the Secretary of State still fails to understand its problems, I cannot see why it is not prepared to continue to argue the case and discuss it. After all, the Secretary of State has already adjusted the figures after examining the position. When the interest figure was lost because of the way in which the accounts were presented and that was explained, the Secretary of State made an adjustment. I hope that once the reports are accepted the council will continue to discuss the issue with the Secretary of State for the good of the people of Dundee.
I turn to what seems to be the most ludicrous and absurd point in what the council has said. It talks about emotive issues. As we have seen in Stirling, when the cuts have to come, councils lead with the most difficult and sensitive cuts. The hon. Member for West Stirlingshire (Mr. Canavan), at Question Time last week, thought that he was making a bull point by saying that the first people to go would by young apprentices. If anything represents the cynical manipulation of young people, that is it.
What is Dundee district council doing? For years the Tory-controlled authority ran a leisure centre at the weekend for the young and the young unemployed. The council has made that a priority cut. The leisure centre will close. That will not save a vast sum. On the other hand, the council has employed specialist political advisers. No other local authority in Scotland has ever done that.
If the council wants to make cuts and to lead with the cuts that are the most sensitive to the community, let it do that. However, it must be made known and made obvious. The council should get rid of political advisers long before it closes leisure centres which have operated effectively for so long.

Mr. Ernie Ross: If the hon. Gentleman is sincere, will he suggest that the Prime Minister makes a gesture and gets rid of her political adviser, who seems to give bad advice and costs the country at least £25,000 a year?

Mr. Fraser: I am sure that when the hon. Gentleman stands outside the leisure centre in Dundee and makes that point it will be greeted with far more rapture than in the House.
It is part and parcel of the Local Government (Miscellaneous Provisions) (Scotland) Act 1981 that, once the reports are approved, once the reduction in expenditure is required through the reduction in the rate support grant, if the local authority is sensible and makes those cuts in expenditure, the Secretary of State will have the opportunity to make up that amount of the rate support grant if the money is returned to the ratepayers.
One of the silliest parts of the argument that has been advanced so far is that, even when the reports are approved and the rate support grant is cut back, not one of the three local authorities will be prepared to give relief to any of their hard-pressed ratepayers. There is nothing more absurd than that. But what is more ludicrous than anything is that people wear badges saying "Export Younger" and yet they are prepared to leave the money with him and his Cabinet rather than return it to their own ratepayers. If nothing else, I urge the three local authorities to have far greater regard than they have had in the past to their own hard-pressed ratepayers.

Mr. Dennis Canavan: Despite denials from the Conservative Benches, the reports amount to probably the most savage attack on local authorities in the history of local government in Scotland.
The proposed cuts in expenditure will mean a severe reduction in essential services, but just as serious is the attack by the Government on the freedom of local authorities and the principle of local democracy. The Secretary of State seems unable to recognise that these councillors were elected on a manifesto to represent the interests of the people. They won their elections and, therefore, they feel that they have a mandate to implement the manifesto on which they stood. But the Secretary of State is now standing in the way. Perhaps, in a sense, that is not surprising, because this Secretary of State has scant regard for manifestos and manifesto commitments—even for the Tory Party manifesto, which speaks out boldly in favour of local democracy and the freedom of local authorities to do their own thing.
This action by the Secretary of State is unprecedented. All who have experience of local government have always admitted that there is a possibility of the central Government intervening in some way in local government affairs. Until now we would have said that the general principle was that it was up to the central Government ultimately to determine the level of rate support grant but that local authorities should be left to determine the rate poundage. That now seems to have come to an end,

because the Government are using a series of tricks, which can only be described as blackmail, to force local authorities into a situation whereby the central Government will not simply be determining the level of rate support but, in effect, will also be trying to determine the level of revenue that is raised from the people who elected the councillors in the first place. That degree of over-centralisation damages the traditions of British democracy.
Some hon. Members on the Government Benches talk about Left-wing extremists and the fear of totalitarianism. They conjure up images, false or true, about what happens in certain Eastern European States. However, the power that the Secretary of State for Scotland has and the way that he intends to use it is reducing Scotland to a situation even worse that that which many East European satellite States had to suffer under the over-centralisation of Stalin. That is the degree of over-centralisation that the right hon.. Gentleman seems to be in favour of. He is like a Stalinist, dictating to the elected representatives of the people of Scotland. As a result, there is grave concern not only among the three local authorities named but among all local authorities in Scotland and south of the border.
It appears that the initial hit list of three will be extended to at least six, and that there will be a further clawback of at least £100 million that will affect all local authorities in Scotland. The Government also seem hell-bent on using the Secretary of State and the people of Scotland as guinea pigs for a new over-centralised bureaucratic dictatorship. If it works in Scotland, no doubt the hooligan who grabbed the Mace and who is now Secretary of State for the Environment will soon have and use the same powers in England and Wales.
In choosing his initial hit list, the Secretary of State is motivated not by reason or cogent argument but by blatant political discrimination. They are all Labour-controlled authorities, as are all the authorities on the reserve hit list, even though some Tory-controlled or so-called independent authorities have also significantly overspent above his guidelines.
I share the concern of all local authorities, and it is important to have unity in the campaign against the Secretary of State's proposals, but because of shortage of time I shall deal only with Stirling, which covers part of my constituency. Like the Secretary of State, I, too, am a ratepayer there, although perhaps there the similarity ends. Unlike him, I do not own any rateable property, and, also unlike him, I intend to vote against the reports.
The Secretary of State bases his case against Stirling on four comparators—what he believes are local authorities in a similar situation—North-East Fife, Moray, Angus and Clydesdale. However, he has so far failed to respond in detail to the reasonable reply given by Stirling district council in its letter of 1 July. It pointed out that of the four authorities selected, only two—Moray and Clydesdale—have a population density similar to Stirling in that they are below the average Scottish density, and one—North-East Fife—has a density more than twice that of Stirling and above the Scottish average.
Although Stirling is largely rural, around the town of Stirling there is a conurbation, but none of the authorities selected has an urban situation similar to that in Stirling, where 78 per cent. of the population live within a radius of 7½ miles of the town, giving a density of 1·37. The Secretary of State also knows that Stirling district, in its reasoned reply, picked two other district councils which


it maintains were more nearly similar than the four that were picked by the Secretary of State. The Secretary of State should be familiar with them, because one of them is in his constituency—the Kyle and Carrick district council. The other is Cunninghame district council, which is in the same area. Some 65 per cent. and 81 per cent. respectively of the population live within the same radius from Ayr and Irvine, with a density of 1·62 and 1·57 respectively. Stirling asked that those district councils be included in the list of comparators. However, the Secretary of State has not said why he did not and the Minister whom we met yesterday to discuss the matter did not give us a detailed reply.
It is worth pointing out that Kyle and Carrick—to its credit, and I believe that it, too, is Labour-controlled—has a planned expenditure of £60.15 per head, and the figure for Cunninghame is £61·50 per head. The corresponding figure for Stirling is not much above that—£62·26 per head of population. That is less than £1 above the figure for Cunninghame, and is less than a fiver above the average figure for all Scottish district councils.
The Secretary of State also says that the growth rate and the rate poundage increase of Stirling district is too high. However, if one takes the rate poundage in 1978–79 as a base, and if Stirling district council from that year had simply levied the national average increase for local authorities, its present rate poundage would be about 36p. The actual rate poundage is now about 40p. Compared with the national figures and with the more reasonable comparators, Stirling district council does not seem too bad.
May I say that I was the first-ever Labour group leader on Stirling district council, at a time when it was unfortunately controlled by a Tory/SNP clique. Before it became Labour-controlled last year, the council was notorious throughout Scotland as being one of the meanest and lowest-spending. When I became the Member of Parliament for West Stirlingshire, I received frequent complaints about the low level of spending on essential services—even or, possibly, especially—from the rural areas with which the Secretary of State is familiar.
The Secretary of State says that Stirling had an abnormally righ rate increase. That is perfectly true, but he forgets to say that part of the reason for it was the inadequacy of the initial rate support grant order that he laid before the House. Now he is cutting it back for Stirling district council, which will make it even worse.
The average domestic rate bill in the district is £290·3, which is about the Scottish average, but not very much so as a percentage. The Scottish average is £270·63, and the figure for Stirling district is only 48p above the average for domestic properties in Strathclyde, which is a more reasonable comparison than some of the comparisons given by the Secretary of State.
No detailed reply seems to be forthcoming from the Secretary of State. He is hell-bent on going ahead with these powers. However, before I finish, I want to mention the employment repercussions of what he is doing. Today a record figure for Scottish unemployment of over 318,000 was announced. The Secretary of State comes to the House and sheds crocodile tears and claims that increased rates will inevitably mean increased unemployment. He has failed to produce one shred of evidence, and I challenge

him to produce a shred of statistically accurate, scientific evidence, that there is some correlation between high rated areas and areas of high unemployment.
The right hon. Gentleman produced letters from department stores such as Jenner, House of Fraser and Woolworth—although he did not mention their names. In his reply to me last week, he said that if he were a member of Stirling district council he would not make cuts that would mean that none of the apprentices who finished their time last week would be offered jobs. That is already happening. We are talking about cuts upon cuts. For the first time ever, Stirling district council was unable to employ a single newly qualified apprentice who had finished his training in the property and maintenance department. There will be more and more such unemployment if the cuts go ahead.
In the Stirling travel-to-work area last month 3,291 people were unemployed. How many more will be unemployed? It is no good imagining that the private sector will pick them up. The Secretary of State's pal, the Secretary of State for Industry, has crippled industry throughout Scotland to such an extent that in many areas it is virtually non-existent. That is due to high interest rates, high energy costs, high transport costs and the downgrading of places like Stirling as development areas.
The public sector in that area is a large employer. It also has a spin-off effect for the private sector, which is significant in the generation of jobs. This is the second blow within a fortnight from the Government against the people of that area. The university received bad news less than a fortnight ago. The Secretary of State for Education and Science said that he proposed a cut of about 25 per cent. in its grant and a similar cut in the number of students. As well as being an important educational institution, the university complements the excellent work done by the local authorities in providing a whole range of community services.
I wish to quote a letter that I recently received. I have the permission of the writer. I shall not quote any anonymous letters, as did the Secretary of State-I suspect that they came from such organisations as the House of Fraser and Woolworth. My letter comes from Professor Dunn, the chairman of the MacRobert Centre management committee of Stirling university. It states
In early September we had arranged to celebrate the tenth anniversary of our founding. If this takes place it could be the event of the year most heavily tinged with irony. For the centre was opened by the man who became the first Chairman of our Advisory Committee and Chairman of our Appeal Fund, namely, Viscount Younger of Leckie. It is sad that the good deeds of the father should be so soon erased by the doctrinaire obscurantism of the son. But we must remember that this Government was elected to be pragmatic and flexible!
We can see the result. The Secretary of State is as flexible as a gauleiter—a gauleiter who has the support of a dwindling minority of people in Scotland. Yet he is hell-bent on imposing his will on the elected representatives of the people of Scotland who have a far better mandate than him to represent their interests.
For that reason, I hope that the House gives maximum support to our friends and colleagues in local government in Scotland to campaign against the Government and to maintain as much as possible of the essential services for the people that they were elected to represent.

Mr. Ian Lang: As the time is somewhat late, I shall try to be brief. A great deal has been said about


the sanctity of local government. Certainly, it is an important part of our democratic process. It might be appropriate at this late hour to try to rectify the balance a little and point out that local government is dependent for its powers, its authority and its activities on the central Government and on what we decide in this House.
As recently as 1975 local government was reformed by Parliament. While we talk about the importance of local autonomy, we should remember that Parliament is the supreme legislature in Britain and should be recognised as such. Some hon. Members have carried the argument further and have said that the Conservative Government have no right to take decisions of this sort involving Scotland. That is to say that the integrity of the United Kingdom is fatally fractured. It is to imply that the previous Labour Government had no authority to legislate for England.
The Government have not only a right but a constitutional duty to ensure that the interests of local ratepayers and local authorities are properly protected. That constitutional duty was neglected in the contribution of the hon. Member for Dundee, West (Mr. Ross). He wanted the Government to maintain the rate support grant at a high level while taking no part in what went on in local authorities. That ambivalent attitude, which is adopted while sitting on both sides of the fence and, no doubt, with both ears firmly to the ground, is damaging to his party in Scotland.
The hon. Member for Glasgow, Provan (Mr. Brown) adopted the same ambiguous attitude. He implied that local authorities are being attacked from both sides-by the Government through their attitude over the rate support grant, and by individuals being given more power under tenants' rights and education legislation. He failed to understand that these are two sides of the same argument. The Government are not attacking local authorities. The Government have been seeking to protect the rights of individuals against oppressive local authorities. That is at the heart of the policies that have been implemented.
The constitutional obligation is one that the Government must observe. Their second duty is to maintain their economic strategy and to ensure that it is not sabotaged by local authorities. The strategy is based on controlling public expenditure. The authorities that are the subject of the reports are concerned with expanding expenditure without any regard to the effect that that will have on the economy.
The third reason why the Government are right to intervene is that they supply about two-thirds of local authority expenditure through the rate support grant. They would be culpably negligent if they took no part in deciding how and to what extent the RSG should run. The national interest is supreme. That must not disguise the considerable malaise in the operation of local authorities. That is manifested by the need for the reports. Many feel that the functions and funding of local authorities should be reconsidered. Had I more time, I should embark on a more remunerative and reflective consideration of that issue than the time available to me permits.
There is something unhealthy in local government when we see it used not as a means of administering local affairs in the interests of local ratepayers but as a political platform from which to propagate party political views. One may say that it was a great pity that party considerations came into local government. However, they did and there is no point now in trying to wish them

away. Whereas local government may have been used before as a springboard for national Government advances, it is being used now as a weapon against Government policies. That is a much more serious development.
We see the same self-importance manifested in the production of economic reports from COSLA. It does not produce the reports itself. It commissions some smart young economist in a university to draw them up for it, thus trying to set itself up with all the paraphernalia of another great estate of the realm. We even see local authorities trying to enact and implement their own foreign policy, as manifested in the Chamber by the hon. Member for Dundee, West, or perhaps the hon. Member for Dundee, West Bank, which might be a more appropriate description. If there is an abuse of government, I submit that it is at local and not at national level.
There are those who say that the cuts will do a great deal more harm when implemented than if they had been introduced and put into practice in a more leisurely approach. Of course that is so. If we get on a helter-skelter and start sliding down it, it is difficult to get off half-way down. That is because we should never have got on it in the first place. It is inevitable that more harm will be done now and that the process will be more painful. The solution was in the hands of the local authorities when they were mapping out their programmes.
As my right hon. Friend said in opening the debate, what we are now producing, in refinement of the earlier powers open to the Government, are measures that can be introduced as preventive medicine rather than a subsequent purge and recrimination. The medicine is selective rather than being a broadside fired across the whole stage. To those who ask "Why pick on Lothian, Stirling and Dundee?", surely the answer is that they are the worst offenders. The answer surely also is that by picking on them and by laying the reports before the House to cut the amounts of money which they will spend, the Government are protecting the other local authorities which have managed to behave with greater prudence and sense, including, for example. the local authorities in the Dumfries and Galloway region.
Therefore, I commend the Government on their sensible action. I believe that they are acting in the interests of the ratepayers not only in Lothian, Stirling and Dundee but those in all the other district and regional authorities throughout Scotland. For that and the broader economic issues which are at stake, I support and will vote in support of the reports.

Mr. William McKelvey: The coverage from Opposition Benches, particularly Labour Members, with regard to the authorities whose conduct we are discussing has been excellent. Perhaps one of the finest speeches was made by my hon. Friend the Member for Edinburgh, Central (Mr. Cook). I am sure that that speech will be used as a basis in times to come on the question of local authorities and the destruction of democracy by the Government.
Most of what was said from Government Benches was irrelevant, with perhaps two exceptions. Perhaps one of those was made without thinking-it was certainly not done on purpose. The hon. Member for Fife, East (Mr. Henderson) said that he looks across the Tay at the Dundee complex, where he says that some of his constituents pay


their rates, and while there has been a savage and swingeing increase of rates in the Dundee area he is able to stand on the Fife side looking at that complex, from an area where there has been no increase. Anyone standing on the Fife side would see the reason for that. He would be looking across at a development where the rates increases have to be paid in order to keep up services. However, that hon. Member and his constituents jump in a car, pay the toll, go across the Tay bridge and use and enjoy the facilities of Dundee, like parasites, without having to pay the rates.
As a child, and brought up in Dundee, I reversed that process. It was one of our few delights in those days to climb aboard the "Fifie" and go across to Fife to enjoy the amenities there. At that time we could gather whelks from the beaches. I was back recently and although the whelks have deteriorated somewhat in quality, that is still the only amenity available on the Fife side of the Tay. One can gather whelks if the tide is out, but otherwise all one can do is paddle. That is the kernel of the matter. It is a question of two ideologies. On the one side of the Tay bridge there is development by a local authority which is trying to provide services for the people and on the other side, like the whelks and the parasites, the people there are prepared to live off the backs of the people on the other side.
When the Secretary of State for Scotland says that there is no political manoeuvre behind the laying of the reports, that is a joke. He talks about the disease of overspending. He lays stress on the point that it was not the guidelines alone which determined him to lay the reports. He did not go further than that. Of course, he is perfectly correct. The guidelines are only secondary. The principal reason was political.
Lothian, Stirling and Dundee were picked on because of their excessive spending on behalf of their constituents, because of their ideology and because they believe that the services must be provided and that they must be paid for. On the other hand, the Government, under the opiate of monetarism, see only one side of the business. That is a question of telling the local authorities that they must hold the cash tight and it does not matter about the irrelevancies of what happens to the elderly, to children, to education and to universities. How many Conservative Members expressed concern about cuts in university education and how that would affect their constituents? [HON. MEMBERS: "Not one."]
My hon. Friend the Member for Glasgow, Provan (Mr. Brown) made a good point when he said that he could understand reductions in expenditure by successive Governments when local authorities could manage to draw on other funds. For example, if the money is required for the youth employment scheme or a garden maintenance scheme, there seems to be a kitty on which local authorities can draw. So long as an authority has paid off its gardeners, it can employ young people on a temporary basis to look after the gardens.
That does not make economic sense, but it provides an opportunity to suppress local government. In this case, it gives the Secretary of State a golden opportunity to woo the Scottish electorate. At the last general election the people of Scotland rejected the Tories and their philosophy, but in order to induce some of them back into the fold the right hon. Gentleman is using the old trick of dropping a couple of pennies in their pockets.
The right hon. Gentleman is saying that they will receive £32 a month, but he fails to point out that there will be no homes for the elderly and that new nurseries will not be staffed. He is saying "But forget that, you can have £32 which you can hang on to." Yet again, he is using the opiate of monetarism to induce the people of Lothian, Stirling and Dundee. It will not work.
That ploy has worked south of the border, because for some reason people here are attracted to that philosophy. However, as a recent by-election result has shown, they will no longer fall for it. [HON. MEMBERS: "What about the Labour Party?"] We won the election. We did not lose our deposit.
The speech of the hon. Member for Perth and East Perthshire (Mr. Walker) was the worst that I have ever heard from the hon. Gentleman. It was certainly the worst speech of the debate. I refer him to page 24 of the COSLA critique which says that industry and commerce will be forced to pay higher rates because of Government cutbacks, and that the blame should be laid at the door of the Government, not at the councils involved.
In fact, the Dundee chamber of commerce said of the hon. Member for Perth and East Perthshire that as an individual he was probably more responsible for the loss of jobs than the antics of the Government.

Mr. Donald Dewar: My hon. Friend the Member for Kilmarnock (Mr. McKelvey) was perhaps a little harsh on the hon. Member for Perth and East Perthshire (Mr. Walker). If we are handing out the palm for the most reactionary and unlikely set of opinions, the field is a strong one, considering the speeches that have been made by Conservative Members.
In defence of the hon. Member for Perth and East Perthshire, we ought to say that at least during his remarks he discovered almost by chance—we should record the fact—that the Government's monetary policy was a total failure. I hope that the hon. Gentleman will continue to bear that in mind in future contributions.
We have heard some eccentric remarks during the debate. For example, there was the extraordinary spectacle of the hon. Member for Aberdeenshire, East (Mr. McQuarrie) plunging into local government statutes. He got the wrong year, the wrong Act and the wrong Government. He also showed a remarkable interest in territorial imperatives, because he plunged into a long denunciation of the leader of the GLC for taking an interest in local government developments in Scotland, which clearly have widespread implications for the relationship between local authorities and central Government throughout the land.
Everyone in the United Kingdom is right to be alarmed by what the Government are doing tonight. We are seeing an attack upon the very fundamentals of the relationship between central and local government which we shall all regret in the years ahead if it is pushed with the blind obstinacy that has so far been shown in these negotiations.
I hope that the Secretary of State will not take it amiss if I say that I thought he made a rather sad opening speech. It is always something of an admission of defeat when a Minister has to rifle his postbag to find arguments which presumably his advisers blushed to write directly into his speech under his name. One may be wrong but put up a spirited defence of one's mistakes. For the right hon. Gentleman, however, there was no more than a whimper.


There was no sign that he believed in his policies. The only thing that seemed to give any stature to his remarks was the effort made shortly afterwards by the hon. Member for Aberdeen, South (Mr. Sproat), who launched what I can only describe as a mean and sneering complaint. Indeed, he was perhaps ashamed of his own remarks as he has not reappeared in the Chamber since.
Listening to the Secretary of State on this subject—and here I make a distinction between the right hon. Gentleman and the Under-Secretary of State—I always have the impression, which is even perhaps something of a plea in mitigation, that the Secretary of State does not really believe in his policies but that he has stumbled and drifted into this confrontation of awesome proportions. If we end up going over the edge and crashing into the abyss, as so many people now fear, the relevant question to ask about the Secretary of State will be "Did he jump, or was he pushed?" because I do not think that his heart is in it.
I wish to consider briefly one or two key questions. The first, obvious and fundamental question is why we have these reports. What is the justification advanced by the Government? As I understand it, we are told that the Government are facing a major crisis, that local authorities are profligate and that a determined group of councils over the years have been distorting public sector spending by indefensible overspending. Any hon. Member who considers the facts and the record will see that that is a generalisation which does not stand up to any reasonable examination.
The Under-Secretary will be familiar, as will most Government Members, with the COSLA critique, produced by that local authority organisation. That document deals fully and effectively with the matter, almost exclusively on the basis of parliamentary answers. The figures have not been dreamt up by people who are party to the opposition to these reports. The information is almost entirely gleaned from answers by the Secretary of State.
I take just one set of figures to encapsulate the position, which is set out with great clarity on that document. Taking Government and local authority expenditure in the period 1975–76 and following through actual expenditure to projected expenditure for 1981–82, one sees that Government expenditure in that period rose by 10·7 per cent. while local authority expenditure in Scotland has fallen by more than 16 per cent. Against that background, the whole foundation of the case for these reports inevitably crumbles. It is simply not possible to maintain the pretence that if Government economic policy is in disorder and disarray—and very few Opposition Members would quarrel with that proposition—it is the fault of profligate local authorities.
Of course, there has been a cumulative overspend on the guidelines of £183 million in Scotland this year. That might be a significant figure if the guidelines had any absolute authority, if they represented some form of truth or static concept, but they are merely spirited up by Ministers to meet the exigencies of the day. The guidelines are shifting and have shifted. Ministers have savagely cut back on the guidelines and when, not suprisingly, they are then exceded, they shout "Scandal" from the rooftops and claim that they need the draconian and unjust measures now before us.
The proof of the argument was presented very firmly by my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) when he pointed out that all but four

of the local authorities have currently exceeded the guidelines laid down by Ministers. Indeed, 28 of them are more than 20 per cent. over. The list of shame—or perhaps the roll of honour, depending on one's point of view—is led by such red revolutionaries as those who sit in the council chambers of Banff and Buchan, Moray and Nairn, Gordon and Caithness. The guidelines have become a farce and a standing joke. They are in no way a foundation upon which can be erected the monstrous proposals embodied in the report.
I regard the methods which are to be used as ill-thought-out and muddled. It is perhaps over-dramatic to describe the measures as engines of oppression, but they have been in need of constant running repairs. At the end of the parliamentary process, at the Report stage, after a lengthy and detailed Committee stage, all sorts of major innovations were hurried forward to try to pull together the rather creaking faults that had so self-evidently appeared. We had the blocking manoeuvre to stop borrowing and the great political wheeze that the Government hope will give them some sort of cheap capital with which to face the electorate—the idea of rate repayment.
But the key argument that the Secretary of State has used is that the measures are selective, that it is the bad authorities that will be hit, and that those which are "innocent" shall escape. We know and the House knows that every local authority in Scotland is threatened., irrespective of the level of co-operation and the earnestness with which it has tried to meet the arbitrary standards imposed by the Scottish Office.
I go back unashamedly to the point that was made in the opening remarks of the shadow Secretary of State. If we talk in terms of negotiation at any time in the process, we must know some of the fundamental facts that will affect negotiation. I do not expect the Secretary of State to say in great detail what his hand will be if and when he gets round the table with any of the local authorities, but we are entitled to know whether the £100 million which he is to claw back, or wishes to claw back, from this year's rate support grant—I leave on one side the £60 million from last year which has not been dealt with—is a fixed sum. If it is, the Secretary of State may say "I will forgo from the sums mentioned in the orders £X million." But the concession will be an illusion and a fraud, because he will be saying silently "We shall still be clawing back out of all the other local authorities, by means of a general levy, exactly the sum that we are apparently conceding." It will merely be a case of misery being redistributed, and a final retreat from the principle of selectivity of which the Secretary of State has made so much.
I have raised the point on many occasions. I was told by the Secretary of State:
Both rebudgeting … and reductions negotiated by the authorities will make it easier to avoid taking the full £100 million".— [Official Report, 15 July 1981; Vol. 8, c. 1168.]
That is just not good enough, because I genuinely do not know what "will make it easier" means in this context.
If Lothian, Dundee or Stirling goes to the table and makes an offer and it is accepted, we are entitled to know that that figure, if it is a shortfall from the original demand, will be deducted from the £100 million total which is apparently the Secretary of State's target for this year.
I have one other point to make on the whole basis of selection, and it is of some importance. I accept that it is clear that the guidelines are not the only test that has been applied by Ministers. That would be too simple a solution.


In the evidence that was given to the Select Committee on Statutory Instruments, the guidelines were described as indicative, not definitive, and in no way as mandatory. I should have thought that there would be some virtue in having guidelines that one could stand by. If there are all sorts of factors which distort those guidelines or make them unsafe, it would be better to have them imported into the original formula.
If that is not to be so, we must turn to the way in which the Secretary of State has applied the comparability test. That is the statutory criterion that has been built into the 1981 Act. Sadly, instead of carrying out objective research into the performances of individual local authorities and, if necessary, penalising those who have failed that impartial test, there was probably a list of predetermined victims and the research was probably rigged to achieve the necessary results. There is some complaint about that.
I shall draw the Secretary of State's attention to the "Social and Economic Classification of Local Authority Areas", which has been produced by the Office of Population Censuses and Surveys. It has been compiled by Mr. Richard Webber and Mr. John Craig. Let us take the rural indicators research, which is a multivariate analysis of district islands, areas and parish data that has been produced by the Scottish Office. That apparently impeccable research, which stems from the Minister's Department, attempts to place what it calls "cluster local authorities" into similar groupings. It applies particularly to district authorities. The extraordinary thing is that if one considers the four comparators that the Secretary of State chose for Dundee and if one then hurries eagerly to the impartial research—some of which comes from the Scottish Office—one finds that only one out of the four comparisons is included in the same cluster. Again, only one of the four comparisons chosen for Stirling by the Secretary of State is included in the research as comparable.
There is something ludicrous about a situation in which the Secretary of State compares Stirling with authorities which, according to the research, do not fall into the same classification of industrial and rural. There is something peculiar about a situation in which Dundee is compared with East Kilbride. A new town is being compared with one of our oldest industrial towns. East Kilbride has a different population and age structure, unless it is out of line with the other new towns.
I object to the fact that one of the other tests is rate poundage. It depends largely on the rate fund contribution, which is dictated by housing policy. However, the Under-Secretary of State specifically told us that that had nothing to do with this mechanism. The expansion of services should be a key idea. However, we all know that there was a lengthy and significant period during which Dundee and Stirling were controlled by low-spending Conservative authorities. I shall not judge whether they were entitled to be low-spending and mean. However, if an increase in expenditure is taken and everything is based on that, everything will be based on a fallacy. The Secretary of State has been remarkably coy about the research material that he has used. He has used a form of intellectual sleight of hand to justify his prejudices. What he has done verges on the fraudulent.
I turn to an equally important matter, namely, how those authorities concerned can be expected to make the

cuts. No one I have spoken to pretends that Lothian will be able to make cuts that amount to £47 million in the fag end of this year. Indeed, £47 million is a staggeringly high proportion of a total rate support grant contribution of £158 million. Of course, there have been offers. I would not expect the Conservative group to be keenly running to sabotage the Secretary of State's efforts. I should have thought that there would have been a fair number of eager toom tabards in that lot. Indeed, the Under-Secretary of State must know many of them, because he was once a member of the old Edinburgh corporation, in the days when he believed in local government, or at least believed in it as a staging post to Parliament. Many of those in the Conservative group must be anxious to help the Government in every way. The best possible offer they can suggest is £25·8 million, which barely scrapes over 50 per cent. of what the Government demand. It is £25·8 million that will be found at considerable sacrifice. There would be a loss of 4,000 jobs, an attack on concessionary fares, an increase in the price of school meals and many other unpleasant consequences.
The hon. Member for Edinburgh, South (Mr. Ancram) said that savings could be found. That is, of course, possible. One can always find savings. One can sometimes find them at a cost that is insupportable and at a cost that makes them a very bad bargain for the electorate. The hon. Member for Edinburgh, South and also the hon. Member for Aberdeen, South produced, with immense pride, what they seemed to suggest were secret documents. They were, in fact, the budget review papers from Lothian region of a year ago. Most of the proposals were incorporated and implemented in the present budget.
The 4,000 jobs that would disappear under the £25·8 million Tory proposals could not be found by natural wastage. According to The Scotsman of 16 July, natural wastage for the whole year in the Lothian region amounted to 3,400. I am indebted to Councillor Meek, leader of the Conservative group, for that information. How, therefore, in half a year, can one find 4,000 redundancies by natural wastage in the cause of achieving only 50 per cent. of what the Government want?
A new and rather remarkable slogan has been produced during the debate. The right hon. Gentleman the Secretary of State, or one of his colleagues, made a remark along the lines of
No loss of jobs, just natural wastage".
My right hon. Friend the Member for Craigton dealt admirably with that slogan. If it is to be paraded around Scotland by Conservative politicians in the year ahead, their present miserable performance in Scotland elector-ally will be well and truly outdone by the ruin that will overcome them.

Mr. Ancram: rose

Mr. Dewar: I shall not give way. I should like to finish by asking the Under-Secretary of State one or two important questions. Hon. Members are entitled to have some idea of where the £47 million will come from. The hon. Gentleman will recall saying in Committee on the Bill that the first job of Ministers was to make a total overall judgment of whether a budget was excessive or unreasonable. The second stage was to break it down into programmes, to examine individual spending areas and to point out where excessive and unreasonable spending arose. That has not been done in the reports. To that extent, the reports are unhelpful and misleading.


Presumably, it has been done in private. The hon. Gentleman should at least be able to explain the job loss implications and the services that he would expect Lothian to attack in terms of a £47 million cut in budget during this financial year.
The Under-Secretary of State is entitled to say that he cannot dictate to a local authority exactly where the cuts should fall. The hon. Gentleman should at least be able to convince the House that the cuts are possible and in so doing produce his own model and indication of where the overspending occurs and the implications of the cuts. We have asked time and again for this kind of help but no answer has been given. The hon. Gentleman has the opportunity to put that right.
Hon. Members talk a great deal about democracy and local government democracy. I am prepared to admit that all of us, on occasions, are guilty of rhetoric and perhaps ritual tributes to the ideas of democracy. I have no doubt that, on occasions, we apply double standards. It is easier to be self-righteous about these matters when in Opposition than when one is dealing with the reality of problems faced in Government. However, having made every allowance that can fairly be made, I believe that the reports represent a substantial threat to the balance between the Government and local authorities in this area. It is not just a little local difficulty; it is not just back-biting between friends or a bickering over a few pounds here or there, or even a few million pounds here or there in the annual round of local government negotiations. We are talking about the fundamental role of local government and about the relationship between the Government and local authorities.
The essence of local government democracy, which cannot be removed if the system is to be left whole, is the right of a local authority to determine its own priorities according to its own local needs and to rate to meet those needs. Of course, there will be an enormous input and influence from the Government, who supply so much of the finance from their own funds, and ultimately local authorities must answer to their electorates. If the Tories are right in what they say about Lothian region, they will look forward with confidence, as we do, to the judgment of the electorate next May. That is the judgment which should matter and on which we should rely.
We make our charges against the reports not because they are unnecessary, although we believe them to be so in terms of overall economic planning, and not because they are unfair, although we believe them to be unfair in every sense for the reasons that I have given, and not because we believe them to be unworkable, although we think that the practical difficulties cry out for attention, but because we believe that they are fundamentally offensive and will sour and embitter relations between Ministers and local councillors, not just under this Government but, if we do not get a bit of sense and flexibility in ministerial attitudes, for years to come.
The Statutory Instruments Committee referred to the unexpected use of the powers. That use may be unexpected to those who are not familiar with what has been happening, but for too long the Government have been on a collision course. They have shrown a thrawn obstinacy and an inability to be generous or genuine in their talk of compromise.
The Government must change now or we shall reach an impasse and such a horrible confrontation that we shall do irretrievable and irreversible damage, which every one of us will regret.

The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): The hon. Member for Glasgow, Garscadden (Mr. Dewar) defended Councillor Ken Livingstone of the GLC as being one of the new bosom pals of the Lothian region and said that every person in the United Kingdom was right to be alarmed about the issue we are debating.
If it is the official Opposition's view that this is not merely a Scottish issue but a matter of major significance to Labour Members throughout the United Kingdom, it is worth noting that for all but the past few minutes the debate might have taken place in the Scottish Grand Committee, given the absence of Labour Members from other parts of the United Kingdom.

Mr. Martin Flannery: Will the Under-Secretary give way?

Mr. Rifkind: No.

Mr. Flannery: Will the Minister give way?

Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. The Minister is not giving way.

Mr. Flannery: What the Minister said was not correct.

Mr. Rifkind: The hon. Member for Sheffield, Hillsborough (Mr. Flannery) entered the Chamber less than an hour ago, in the latter part of the debate. Anyone who has sat through the debate knows that.
As the hon. Member for Garscadden made his philippic on behalf of local authorities in Scotland, I had a recurring thought. I pictured him standing on this side of the Dispatch Box as the Minister responsible for local government finance. I wonder whether, faced with local authorities proposing an overspend of £180 million, the hon. Gentleman would have devoted so much of his speech to extolling the virtues of local democracy. I wondered whether, faced with a single authority proposing an overspend of £63 million, the hon. Gentleman would have extolled the local mandate at the expense of the national interest. I also wondered whether, in those circumstances, the content of his speech would have been the same. We know from the practice of the Labour Government, as opposed to the rhetoric of the Labour Opposition, that that is unlikely to have been the case, but if the hon. Gentleman maintains that that is the same speech he would have made in Government we can say, as was once said of Mr. Gladstone, that he can convince most people of most things and that he can convince himself of almost anything.

Mr. Dewar: I am flattered with the analogy with Mr. Gladstone, but I find it inappropriate. No doubt I stray, on occasions, but I manage to be more consistent and find it harder to eat my principles than the hon. Gentleman has done on devolution.

Mr. Rifkind: When we are dealing with local government finance, the House is aware that the case that must be answered on local democracy and local mandates is not a case that must be answered to the Opposition who do not believe in it, but I concede that it must be answered


to the local authorities. I freely accept that many people within local authorities genuinely believe that there are great issues of local authority constitutional rights and that they have a local mandate received from a local election which for such matters is superior to the national mandate achieved by a national Government. It is right and proper that I should answer such points because some local councillors believe them.
My hon. Friends the Members for Galloway (Mr. Lang) and South Angus (Mr. Fraser) correctly pointed out the constitutional position. When local authorities suggest that they have an insuperable local mandate which national Governments should not interfere with, there is a straightforward answer. I was astonished by what the hon. Member for Edinburgh, Central (Mr. Cook) said, that the local authorities are the only independent elected bodies that can act as a bulwark against the whims of the Government. The hon. Gentleman seemed to have overlooked Parliament. That is the function of Parliament. For the hon. Gentleman to suggest that the local authorities are an independent source of political legitimacy, in the context that he advanced, holds little substance.
Ours is not a federal system. The local authorities do not have a federal relationship with Parliament, with an independent source of political legitimacy. Local authorities in Scotland are, and have always been, creatures of Parliament. Each of the councils that we are discussing was created by an Act of Parliament which we passed only a few years ago. To suggest that constitutionally a local authority is a comparable body with the same status and political mandate as the national Government is an argument that hon. Gentlemen do not believe and which the vast majority of councillors would not advance.
There is another factor. Some would argue—

Mr. Robert Hughes: rose—

Mr. Cook: Will the hon. Gentleman give way?

Mr. Rifkind: I shall not give way at the moment. Perhaps later I shall give way to the hon. Gentleman.
Another argument genuinely advanced by local authorities is that, while they do not accept the argument that they have some constitutional equality with Parliament and national Government, it is wrong for the Government to interfere in purely local matters and issues of purely local policy. That is an interesting argument, but it does not coincide with the practice of any Government over the past 100 years. There are multitudes of subjects in the realms of education, social work, transport, roads and housing in which successive Governments have interfered—if one wishes to use that word—in the minutest way with the wishes of local authorities. For many years, even up to the present, Secretaries of State have been able to forbid a local authority from establishing a pedestrian crossing if it conflicted with the criteria laid down by the Government. Is it seriously being suggested that that is not a legitimate exercise of central Government influence and that any attempt to control the expenditure of a local authority is utterly indefensible?
When the Opposition put that case one is entitled to remind them that in the final stages of consideration of the Local Government (Miscellaneous Provisions) (Scotland) Act the Opposition marched through the Lobby seeking to

impose on Scottish local authorities a statutory obligation to appoint an access officer to control access for the disabled to public buildings. I am not commenting on the merits of the proposal. I am saying that if there is no fundamental principle that prevents Parliament, the Labour Party or the Government telling a local authority what its statutory obligation should be in respect of one of its employees, to suggest that it is an unwarrantable interference in that authority's freedom of action to seek to control its total expenditure is complete and utter nonsense.

Mr. Robert Hughes: If the Minister is saying that local authorities are the creatures of Government, why does not the legislation put local authorities on the same basis as health authorities, which are not elected? If the Minister is saying that the Government have a direct responsibility for local authority budgets, why is he not doing a clean job instead of hiding behind the facts and asking local authorities to do his dirty work for him?

Mr. Rifkind: If the hon. Gentleman had listened he would have heard that I said that local authorities were the creatures of Parliament, not Government. They were created by Parliament, and that is different.
The Opposition might say that they accept that Parliament and Government have a right to determine education, housing and social policy. However, they might seek to make a distinction when it comes to finance—expenditure and revenue matters. The Opposition might seek to suggest that when dealing with expenditure different considerations should apply. They might say that, whatever right Parliament or Government have to intervene in some areas, they have no right to intervene over expenditure. Expenditure consists of capital and current expenditure. For many years the Government have had almost total control over the capital expenditure of local authorities. Until the last one or two years they have had to give sanction to every individual project that a local authority wished to pursue.
Borrowing is vital to the interests of local authorities. For many years a corpus of statutory provision has regulated local authority borrowing powers in a way which has been accepted by successive Governments. The hon. Member for Garscadden conceded that the rate support grant, accounting as it does for a high proportion of local authority expenditure, inevitably is a matter in which the Government take an interest.
It is suggested that while the Government might seek to influence local authority expenditure, they should not seek to ensure that the national interest is observed. The House should reflect that Governments, whether Labour, believing in an increase in public expenditure, or Tory, wishing to reduce it, have always accepted that the totality of public expenditure is an essential and legitimate part of the Government's economic strategy. When one considers that the totality of local authority spending in the United Kingdom this year will amount to about £30,000 million, or between one-quarter and one-third of all public expenditure, not one hon. Member will suggest that such sums can be left out of account when any Government seek to control public expenditure.

Mr. Russell Johnston: The Minister's argument is extraordinary. It is 15 years since the Royal Commission on local government was established. Its object was to give local authorities more independence from the Government. The implication was that at a further stage


that independence would apply also to finance. The Minister seems to be throwing the whole idea out of the window.

Mr. Rifkind: I do not seek to throw the whole idea out of the window. However, a settled part of the relationship between the Government and local authorities over many years has been that when the Government requested local authorities to moderate their expenditure in the national interest—as the last Labour Government did—local authorities have responded. The have done that not entirely to meet the wishes of the Government, but they have sought to respond, to a lesser or greater extent, whatever their political complexion and whether or not they agreed with the Government.
I accept that many local authorities seek to do that today. Some have responded, although perhaps not as much as the Government might have wished. The authorities with which we are dealing tonight have deliberately chosen to move in the opposite direction. They have deliberately chosen over successive years not simply not to reduce expenditure enough or to maintain it at its existing level but deliberately and consciously to plan substantial growth year after year, irrespective of the effect not only on their ratepayers but on the national interest.
That is the fundamental problem that the previous Government did not have to deal with. When they requested local authorities to co-operate, of course, they did not co-operate to the extent that they wished, but no authority sought to overspend by £63 million in one year, as Lothian is doing. Conservative and Labour authorities co-operated and did not seek to divide.

Mr. Cook: The hon. Gentleman is an intelligent and well-educated man, so he he must be aware that, if Lothian region raises a certain sum in rates and spends within the region that sum on maintaining a high quality of services, the economic effect on the remainder of Great Britain outwith Lothian region is precisely and absolutely neutral. What possible national interest can he, therefore, claim for interfering by a specified amount in a local authority's budget?

Mr. Rifkind: The hon. Gentleman is the Opposition Treasury spokesman, so will be well aware that local authority expenditure is an integral part of public expenditure. When one considers that Lothian's proposed overspend of £63 million is almost as much as the entire sum given to the Housing Corporation in Scotland for housing association activities, one gets an idea of the scale of the problem.
The right hon. Member for Glasgow, Craigton (Mr. Millan) asked me to turn to the reports. I shall do so, but I make no apology for dealing with the claims of local democracy, as they formed the major part of the debate.
The right hon. Gentleman complains that the Government's selective actions will not benefit the remainder of Scottish local authorities because of a possible general abatement. Let me make it clear to the right hon. Gentleman and the House what would have occurred if no selective powers were available and if there were a general abatement of the full £100 million. Dumfries and Galloway, which has actually spent under the guidelines by £100,000, would have been penalised by over £2 million. The Highland region, whose excess over the guideline is only £2 million, would have been penalised by more than £4 million. Strathclyde regional

council, the right hon. Gentleman's own authority, is £29 million above the guideline and would have been penalised to the extent of £45 million. Would he have preferred that?

Mr. Millan: Perhaps the hon. Gentleman will now answer the question that has been asked on numerous occasions. How will the authorities be penalised by the Government? There is to be a general clawback, so how much is involved?

Mr. Rifkind: I notice that the right hon. Gentleman did not say that he would prefer Strathclyde to suffer the brunt of a full general abatement without selective measures. It might have been more honest of him to acknowledge that the selective powers will benefit an authority such as Strathclyde.
The right hon. Gentleman should know by now that the proposed volume overspend in Scotland is £180 million. My right hon. Friend has said that the maximum abatement of grant will be £100 million for the current: year. That sum will be met in two ways—by selective measures against those authorities whose expenditure is excessive and unreasonable and by a general abatement for all authorities. The extent to which that is shared between the two groups of authorities will depend not only on cuts eventually implemented in the selective authorities but also on the extent to which local authorities as a whole revise their budgets. We do not yet know the outcome of the budget revision, and, until we do, it is impossible to say what the size of the general abatement will be. The right hon. Gentleman knows that, and he should not pretend that there is a mystery.

Mr. Millan: The hon. Gentleman has confirmed for the first time that any reductions in the selective penalties will be added to the general penalties and redistributed throughout every local authority in Scotland.

Mr. Rifkind: The right hon. Gentleman would be correct only if the £100 million was immutable. It is not. It depends on the selective measures and on the revision of budgets that local authorities may indulge in.
The right hon. Gentleman also asked what the immediate consequences of this report would be if it were passed. I think that the whole House was grateful that, for the first time during the past two years, the right hon. Gentleman called upon Lothian regional council to reduce its spending. It is the first time that the has said that. He has been asked during the past two or three years to use his undoubted influence to seek to moderate the expenditure plans of some of the highest spending local authorities in Scotland, but he has refused to do so. We welcome the fact that at this late date he is now prepared to call for a compromise and to ask the Lothian region and the other authorities to meet the Secretary of State and to seek to reach an agreement. We are sorry that he did not feel able to do that slightly earlier, when it would have had a greater impact. Nevertheless, we welcome it now.
If these reports are approved by the House, my right hon. Friend has already told the local authorities that he intends 10 allow a short period during which they can have discussions with him. We envisage a period of about eight to 10 days. If at the end of that time there is no sign that any discussions are likely to lead to some form of agreement, inevitably the report will be implemented. If by that stage discussions had begun and it was simply a matter of a slight extension to see whether the discussions could be fruitful, the Government


would not be rigid about the time scale. However, that would apply only if it appeared at the end of the period that further discussions would be fruitful, because that would be in everyone's interest.
It is still open to each of the authorities not to lose a single penny in rate support grant. For the first time ever, Scottish local authorities, faced with a loss of rate support grant, have the specific option, as an alternative to losing a single penny of grant from the Government, of changing their rate poundage in mid-term, reducing their rates, and giving the money back to the local ratepayers. That power has not been available to them in the past. If they exercise that power, it will ensure that the sums concerned remain within the local community and continue to benefit the local economy. In addition, the authorities would not lose a single penny to the Government.

Mr. Millan: The report that we are being asked to approve provides for a reduction of £47 million in the case of Lothian. We have said that that is impossible, and we have asked the Minister to explain how Lothian region can reduce its expenditure in the current year by £47 million without making thousands of redundancies. The Minister has three minutes left. Will he answer that question?

Mr. Rifkind: The right hon. Gentleman will be aware that every opposition party in Lothian regional council has produced proposals, ranging between £18 million and £30 million, which, before the question of compulsory redun-dancies was even considered, could produce many millions of pounds in major savings. We have not yet heard from the right hon. Gentleman whether that is the kind of savings that he would wish the regional council to implement.
The proposals before the House need not lead to the loss of a single pound by the local authority, or to the loss of a single pound to the local community or the local economy of the area. If the local authorities choose not to implement the rates reduction and insist on giving money back to the Government instead of giving it back to their-local ratepayers, they will have to give an explanation for their action to the communities concerned.
I and my right hon. Friend realise that it is difficult for authorities such as Lothian, Stirling or Dundee—which have strong political views, deeply held, the sincerity of which I do not question for a moment—to make the sort of changes that will be required to bring down their expenditure. I freely accept that it is a difficult problem for any local authority. However, in a few minutes the House will have the opportunity to vote on the matter. I hope that if the authorities believe in democracy and accountability to Parliament, they will acknowledge that Parliament will have spoken on the matter and that the Secretary of State will then be entitled to act. I hope that they will respond not only to what my right hon. Friend has said but to what Opposition Members have said, and will come to my right hon. Friend so that a proper, acceptable and honourable agreement can be achieved in the interests of the people whom they serve.

Question put:—

The House divided: Ayes 302, Noes 245.

Division No. 282]
[10.00 pm


AYES


Adley, Robert
Alison, Michael


Aitken, Jonathan
Amery, Rt Hon Julian


Alexander, Richard
Ancram, Michael





Arnold, Tom
Fletcher-Cooke, Sir Charles


Aspinwall, Jack
Fookes, Miss Janet


Atkins, Rt Hon H.(S'thorne)
Forman, Nigel


Atkins, Robert(Preston N)
Fowler, Rt Hon Norman


Atkinson, David (B'm'th,E)
Fox, Marcus


Baker, Kenneth(St.M'bone)
Fraser, Rt Hon Sir Hugh


Baker, Nicholas (N Dorset)
Fraser, Peter (South Angus)


Banks, Robert
Galbraith, Hon T. G. D.


Beaumont-Dark, Anthony
Gardiner, George (Reigate)


Bendall, Vivian
Gardner, Edward (S Fylde)


Bennett, Sir Frederic (T'bay)
Garel-Jones, Tristan


Benyon, Thomas (A'don)
Gilmour, Rt Hon Sir Ian


Benyon, W. (Buckingham)
Glyn, Dr Alan


Best, Keith
Goodhart, Philip


Bevan, David Gilroy
Goodhew, Victor


Biffen, Rt Hon John
Goodlad, Alastair


Biggs-Davison, John
Gorst, John


Blackburn, John
Gow, Ian


Blaker, Peter
Gower, Sir Raymond


Body, Richard
Grant, Anthony (Harrow C)


Bonsor, Sir Nicholas
Gray, Hamish


Boscawen, Hon Robert
Greenway, Harry


Bottomley, Peter (W'wich W)
Grieve, Percy


Bowden, Andrew
Griffiths, E.(B'y St. Edm'ds)


Boyson, Dr Rhodes
Griffiths, Peter (Portsm'th N)


Brains, Sir Bernard
Grist, Ian


Bright, Graham
Grylls, Michael


Brinton, Tim
Gummer, John Selwyn


Brittan, Leon
Hamilton, Hon A.


Brooke, Hon Peter
Hamilton, Michael (Salisbury)


Brotherton, Michael
Hampson, Dr Keith


Brown, Michael(Brigg &amp; Sc'n)
Hannam, John


Browne, John (Winchester)
Haselhurst, Alan


Bruce-Gardyne, John
Havers, Rt Hon Sir Michael


Bryan, Sir Paul
Hawkins, Paul


Buck, Antony
Hawksley, Warren


Budgen, Nick
Hayhoe, Barney


Bulmer, Esmond
Heath, Rt Hon Edward


Burden, Sir Frederick
Heddle, John


Butcher, John
Henderson, Barry


Cadbury, Jocelyn
Hicks, Robert


Carlisle, John (Luton West)
Higgins, Rt Hon Terence L.


Carlisle, Kenneth (Lincoln)
Hogg, Hon Douglas (Gr'th'm)


Chalker, Mrs. Lynda
Holland, Philip (Carlton)


Channon, Rt. Hon. Paul
Hooson, Tom


Chapman, Sydney
Hordern, Peter


Churchill, W. S.
Howell, Rt Hon D. (G'ldf'd)


Clark, Hon A. (Plym'th, S'n)
Howell, Ralph (N Norfolk)


Clark, Sir W. (Croydon S)
Hunt, John (Ravensbourne)


Clarke, Kenneth (Rushcliffe)
Hurd, Hon Douglas


Clegg, Sir Walter
Irving, Charles (Cheltenham)


Cockeram, Eric
Jenkin, Rt Hon Patrick


Colvin, Michael
Jessel, Toby


Cope, John
Johnson Smith, Geoffrey


Cormack, Patrick
Jopling, Rt Hon Michael


Corrie, John
Joseph, Rt Hon Sir Keith


Costain, Sir Albert
Kaberry, Sir Donald


Cranborne, Viscount
Kellett-Bowman, Mrs Elaine


Critchley, Julian
Kershaw, Anthony


Crouch, David
Kimball, Marcus


Dean, Paul (North Somerset)
King, Rt Hon Tom


Dickens, Geoffrey
Kitson, Sir Timothy


Douglas-Hamilton, Lord J.
Knox, David


du Cann, Rt Hon Edward
Lamont, Norman


Dunn, Robert (Dartford)
Lang, Ian


Durant, Tony
Langford-Holt, Sir John


Dykes, Hugh
Latham, Michael


Eden, Rt Hon Sir John
Lawrence, Ivan


Edwards, Rt Hon N. (P'broke)
Lawson, Rt Hon Nigel


Eggar, Tim
Lee, John


Elliott, Sir William
Lennox-Boyd, Hon Mark


Eyre, Reginald
Lester, Jim (Beeston)


Fairgrieve, Russell
Lewis, Kenneth (Rutland)


Faith, Mrs Sheila
Lloyd, Peter (Fareham)


Farr, John
Loveridge, John


Fell, Anthony
Luce, Richard


Fenner, Mrs Peggy
Lyell, Nicholas


Finsberg, Geoffrey
McCrindle, Robert


Fisher, Sir Nigel
Macfarlane, Neil


Fletcher, A. (Ed'nb'gh N)
MacGregor, John






MacKay, John (Argyll)
Roberts, M. (Cardiff NW)


Macmillan, Rt Hon M.
Roberts, Wyn (Conway)


McNair-Wilson, M. (N'bury)
Rossi, Hugh


McNair-Wilson, P. (New F'st)
Rost, Peter


McQuarrie, Albert
Royle, Sir Anthony


Madel. David
St. John-Stevas, Rt Hon N.


Major, John
Scott, Nicholas


Marland, Paul
Shaw, Giles (Pudsey)


Marlow, Tony
Shaw, Michael (Scarborough)


Marshall, Michael (Arundel)
Shelton, William (Streatham)


Marten, Neil (Banbury)
Shepherd, Colin (Hereford)


Mates, Michael
Shepherd, Richard


Mather, Carol
Shersby, Michael


Maude, Rt Hon Sir Angus
Silvester, Fred


Mawby, Ray
Sims, Roger


Mawhinney, Dr Brian
Skeet, T. H. H.


Maxwell-Hyslop, Robin
Speed, Keith


Mayhew, Patrick
Speller, Tony


Mellor, David
Spence, John


Meyer, Sir Anthony
Spicer, Jim (West Dorset)


Miller, Hal (B'grove)
Spicer, Michael (S Worcs)


Mills, Iain (Meriden)
Sproat, Iain


Mills, Peter (West Devon)
Squire, Robin


Miscampbell, Norman
Stainton, Keith


Moate, Roger
Stanbrook, Ivor


Monro, Hector
Stanley, John


Montgomery, Fergus
Steen, Anthony


Moore, John
Stevens, Martin


Morgan, Geraint
Stewart, Ian (Hitchin)


Morris, M. (N'hampton S)
Stewart, A.(E Renfrewshire)


Morrison, Hon C. (Devizes)
Stokes, John


Morrison, Hon P. (Chester)
Stradling Thomas, J.


Mudd, David
Tapsell, Peter


Murphy, Christopher
Taylor, Teddy (S'end E)


Myles, David
Temple-Morris, Peter


Neale, Gerrard
Thomas, Rt Hon Peter


Needham, Richard
Thompson, Donald


Neubert, Michael
Thorne, Neil (Ilford South)


Newton, Tony
Thornton, Malcolm


Normanton, Tom
Townend, John (Bridlington)


Onslow, Cranley
Townsend, Cyril D, (B'heath)


Oppenheim, Rt Hon Mrs S.
Trippier, David


Osborn, John
Trotter, Neville


Page, John (Harrow, West)
van Straubenzee, W. R.


Page, Rt Hon Sir G. (Crosby)
Vaughan, Dr Gerard


Page, Richard (SW Herts)
Viggers, Peter


Parkinson, Cecil
Waddington, David


Parris, Matthew
Wakeham, John


Patten, Christopher (Bath)
Waldegrave, Hon William


Patten, John (Oxford)
Walker, B. (Perth )


Pattie, Geoffrey
Wall, Patrick


Pawsey, James
Walters, Dennis


Percival, Sir Ian
Ward, John


Peyton, Rt Hon John
Warren, Kenneth


Pink, R. Bonner
Watson, John


Pollock, Alexander
Wells, John (Maidstone)


Prentice, Rt Hon Reg
Wells, Bowen


Price, Sir David (Eastleigh)
Wheeler, John


Prior, Rt Hon James
Whitney, Raymond


Proctor, K. Harvey
Wickenden, Keith


Pym, Rt Hon Francis
Wiggin, Jerry


Rathbone, Tim
Williams, D.(Montgomery)


Rees, Peter (Dover and Deal)
Winterton, Nicholas


Rees-Davies, W. R.
Wolfson, Mark


Renton, Tim
Young, Sir George (Acton)


Rhodes James, Robert
Younger, Rt Hon George


Rhys Williams, Sir Brandon



Ridley, Hon Nicholas
Tellers for the Ayes:


Ridsdale, Sir Julian
Mr. Spencer Le Merchant and


Rifkind, Malcolm
Mr. Anthony Berry.




NOES


Abse, Leo
Atkinson, N.(H'gey,)


Adams, Allen
Barnett, Guy (Greenwich)


Allaun, Frank
Barnett, Rt Hon Joel (H'wd)


Alton, David
Beith, A. J.


Anderson, Donald
Benn, Rt Hon A. Wedgwood


Archer, Rt Hon Peter
Bennett, Andrew(St'kp't N)


Ashley, Rt Hon Jack
Bidwell, Sydney


Ashton, Joe
Booth, Rt Hon Albert





Boothroyd, Miss Betty
Healey, Rt Hon Denis


Bottomley, Rt Hon A.(M'b'ro)
Heffer, Eric S.


Bray, Dr Jeremy
Hogg, N. (E Dunb't'nshire)


Brocklebank-Fowler, C.
Holland, S. (L'b'th, Vauxh'll)


Brown, Hugh D. (Provan)
Home Robertson, John


Brown, R. C. (N'castle W)
Homewood, William


Brown, Ronald W. (H'ckn'y S)
Hooley, Frank


Buchan, Norman
Howell, Rt Hon D.


Callaghan, Jim (Midd't'n &amp; P)
Hoyle, Douglas


Campbell-Savours, Dale
Huckfield, Les


Canavan, Dennis
Hughes, Mark (Durham)


Carter-Jones, Lewis
Hughes, Robert (Aberdeen N)


Clark, Dr David (S Shields)
Hughes, Roy (Newport)


Cocks, Rt Hon M. (B'stol S)
Janner, Hon Greville


Cohen, Stanley
Jay, Rt Hon Douglas


Coleman, Donald
Johnson, James (Hull West)


Concannon, Rt Hon J. D.
Johnson, Walter (Derby S)


Conlan, Bernard
Johnston, Russell (Inverness)


Cook, Robin F.
Jones, Rt Hon Alec (Rh'dda)


Cowans, Harry
Jones, Barry (East Flint)


Cox, T. (W'dsw'th, Toot'g)
Jones, Dan (Burnley)


Craigen, J. M.
Kaufman, Rt Hon Gerald


Crowther, J. S.
Kerr, Russell


Cryer, Bob
Kilfedder, James A.


Cunliffe, Lawrence
Kilroy-Silk, Robert


Cunningham, G. (Islington S)
Kinnock, Neil


Cunningham, Dr J. (W'h'n)
Lambie, David


Dalyell, Tam
Lamond, James


Davidson, Arthur
Leadbitter, Ted


Davies, Rt Hon Denzil (L'lli)
Leighton, Ronald


Davies, Ifor (Gower)
Lestor, Miss Joan


Davis, Clinton (Hackney C)
Lewis, Arthur (N'ham NW)


Davis, T. (B'ham, Stechf'd)
Lewis, Ron (Carlisle)


Deakins, Eric
Litherland, Robert


Dean, Joseph (Leeds West)
Lofthouse, Geoffrey


Dempsey, James
Lyon, Alexander (York)


Dewar, Donald
Lyons, Edward (Bradf'd W)


Dixon, Donald
Mabon, Rt Hon Dr J. Dickson


Dobson, Frank
McCartney, Hugh


Dormand, Jack
McDonald, Dr Oonagh


Douglas-Mann, Bruce
McElhone, Frank


Dubs, Alfred
McKay, Allen (Penistone)


Duffy, A. E. P.
McKelvey, William


Dunn, James A.
MacKenzie, Rt Hon Gregor


Dunnett, Jack
Maclennan, Robert


Dunwoody, Hon Mrs G.
McMahon, Andrew


Eadie, Alex
McNally, Thomas


Eastham, Ken
McNamara, Kevin


Edwards, R. (W'hampt'n S E)
McTaggart, Robert


Ellis, R. (NE D'bysh're)
Magee, Bryan


English, Michael
Marks, Kenneth


Ennals, Rt Hon David
Marshall, D(G'gow S'ton)


Evans, Ioan (Aberdare)
Marshall, Dr Edmund (Goole)


Evans, John (Newton)
Marshall, Jim (Leicester S)


Ewing, Harry
Mason, Rt Hon Roy


Faulds, Andrew
Maxton, John


Field, Frank
Maynard, Miss Joan


Flannery, Martin
Meacher, Michael


Fletcher, Raymond (Ilkeston)
Mellish, Rt Hon Robert


Fletcher, Ted (Darlington)
Mikardo, Ian


Foot, Rt Hon Michael
Millan, Rt Hon Bruce


Forrester, John
Miller, Dr M. S. (E Kilbride)


Foster, Derek
Mitchell, Austin (Grimsby)


Foulkes, George
Mitchell, R. C. (Soton Itchen)


Fraser, J. (Lamb'th, N'w'd)
Morris, Rt Hon A. (W'shawe)


Freeson, Rt Hon Reginald
Morris, Rt Hon C. (O'shaw)


Garrett, W. E. (Wallsend)
Morris, Rt Hon J. (Aberavon)


George, Bruce
Morton, George


Gilbert, Rt Hon Dr John
Moyle, Rt Hon Roland


Ginsburg, David
Mulley, Rt Hon Frederick


Golding, John
Newens, Stanley


Graham, Ted
Oakes, Rt Hon Gordon


Grant, George (Morpeth)
O'Halloran, Michael


Grant, John (Islington C)
O'Neill, Martin


Hamilton, W. W. (C'tral Fife)
Orme, Rt Hon Stanley


Hardy, Peter
Owen, Rt Hon Dr David


Harrison, Rt Hon Walter
Palmer, Arthur


Hart, Rt Hon Dame Judith
Park, George


Hattersley, Rt Hon Roy
Parker, John


Haynes, Frank
Pendry, Tom






Penhaligon, David
Stott, Roger


Powell, Raymond (Ogmore)
Strang, Gavin


Prescott, John
Summerskill, Hon Dr Shirley


Radice, Giles
Taylor, Mrs Ann (Bolton W)


Rees, Rt Hon M (Leeds S)
Thomas, Dafydd (Merioneth)


Richardson, Jo
Thomas, Jeffrey (Abertillery)


Roberts, Albert (Normanton)
Thomas, Dr R.(Carmarthen)


Roberts, Allan (Bootle)
Thorne, Stan (Preston South)


Roberts, Ernest (Hackney N)
Tilley, John


Roberts, Gwilym (Cannock)
Tinn, James


Robertson, George
Torney, Tom


Robinson, G. (Coventry NW)
Urwin, Rt Hon Tom


Rodgers, Rt Hon William
Varley, Rt Hon Eric G.


Roper, John
Wainwright, E.(Dearne V)


Ross, Ernest (Dundee West)
Wainwright, R.(Colne V)


Rowlands, Ted
Walker, Rt Hon H.(D'caster)


Ryman, John
Watkins, David


Sandelson, Neville
Weetch, Ken


Sever, John
Welsh, Michael


Sheerman, Barry
White, J. (G'gow Pollok)


Sheldon, Rt Hon R.
Whitehead, Phillip


Shore, Rt Hon Peter
Whitlock, William


Short, Mrs Renée
Willey, Rt Hon Frederick


Silkin, Rt Hon J. (Deptford)
Williams, Rt Hon A.(S'sea W)


Silkin, Rt Hon S. C. (Dulwich)
Wilson, Gordon (Dundee E)


Silverman, Julius
Wilson, Rt Hon Sir H.(H'ton)


Skinner, Dennis
Wilson, William (C'try SE)


Smith, Cyril (Rochdale)
Winnick, David


Smith, Rt Hon J. (N Lanark)
Woodall, Alec


Snape, Peter
Woolmer, Kenneth


Soley, Clive
Wright, Sheila


Spearing, Nigel
Young, David (Bolton E)


Spriggs, Leslie



Stallard, A. W.
Tellers for the Noes:


Steel, Rt Hon David
Mr. James Hamilton and


Stewart, Rt Hon D. (W Isles)
Mr. Frank White.


Stoddart, David

Question accordingly agreed to.

Resolved,
That the Report on the Rate Support Grant Reduction (Lothian Region) 1981–82, a copy of which was laid before this House on 10th July, be approved.

It being after Ten o'clock, MR. DEPUTY SPEAKER proceeded, pursuant to order this day, to put forthwith the Questions necessary for the disposal of the business to be concluded at that hour.

Motion made, and Question put,
That the Report on the Rate Support Grant Reduction (Dundee and Stirling Districts) 1981–82, a copy of which was laid before this House on 10th July, in respect of Dundee District, be approved.—[Mr. Younger.]

The House divided: Ayes 302, Noes 242.

Division No. 283]
[10.14 pm


AYES


Adley, Robert
Biggs-Davison, John


Aitken, Jonathan
Blackburn, John


Alexander, Richard
Blaker, Peter


Alison, Michael
Body, Richard


Amery, Rt Hon Julian
Bonsor, Sir Nicholas


Ancram, Michael
Boscawen, Hon Robert


Arnold, Tom
Bottomley, Peter (W'wich W)


Aspinwall, Jack
Bowden, Andrew


Atkins, Rt Hon H.(S'thorne)
Boyson, Dr Rhodes


Atkins, Robert(Preston N)
Braine, Sir Bernard


Atkinson, David (B'm'th,E)
Bright, Graham


Baker, Kenneth(St.M'bone)
Brinton, Tim


Baker, Nicholas (N Dorset)
Brittan, Leon


Banks, Robert

Brooke, Hon Peter


Beaumont-Dark, Anthony
Brotherton, Michael


Bendall, Vivian
Brown, Michael(Brigg &amp; Sc'n)


Bennett, Sir Frederic (T'bay)
Browne, John (Winchester)


Benyon, Thomas (A'don)
Bruce-Gardyne, John


Benyon, W. (Buckingham)
Bryan, Sir Paul


Best, Keith
Buck, Antony


Bevan, David Gilroy
Budgen, Nick


Biffen, Rt Hon John
Bulmer, Esmond





Burden, Sir Frederick
Heddle, John


Butcher, John
Henderson, Barry


Cadbury, Jocelyn
Hicks, Robert


Carlisle, John (Luton West)
Higgins, Rt Hon Terence L.


Carlisle, Kenneth (Lincoln)
Hogg, Hon Douglas (Gr'th'm)


Chalker, Mrs. Lynda
Holland, Philip (Carlton)


Channon, Rt. Hon. Paul
Hooson, Tom


Chapman, Sydney
Hordern, Peter


Churchill, W. S.
Howell, Rt Hon D. (G'ldf'd)


Clark, Hon A. (Plym'th, S'n)
Howell, Ralph (N Norfolk)


Clark, Sir W. (Croydon S)
Hunt, John (Ravensbourne)


Clarke, Kenneth (Rushcliffe)
Hurd, Hon Douglas


Clegg, Sir Walter
Irving, Charles (Cheltenham)


Cockeram, Eric
Jenkin, Rt Hon Patrick


Colvin, Michael
Jessel, Toby


Cope, John
Johnson Smith, Geoffrey


Cormack, Patrick
Jopling, Rt Hon Michael


Corrie, John
Joseph, Rt Hon Sir Keith


Costain, Sir Albert
Kaberry, Sir Donald


Cranborne, Viscount
Kellett-Bowman, Mrs Elaine


Critchley, Julian
Kershaw, Anthony


Crouch, David
Kimball, Marcus


Dean, Paul (North Somerset)
King, Rt Hon Tom


Dickens, Geoffrey
Kitson, Sir Timothy


Douglas-Hamilton, Lord J.
Knox, David


du Cann, Rt Hon Edward
Lamont, Norman


Dunn, Robert (Dartford)
Lang, Ian


Durant, Tony
Langford-Holt, Sir John


Dykes, Hugh
Latham, Michael


Eden, Rt Hon Sir John
Lawrence, Ivan


Edwards, Rt Hon N. (P'broke)
Lawson, Rt Hon Nigel


Eggar, Tim
Lee, John


Elliott, Sir William
Lennox-Boyd, Hon Mark


Eyre, Reginald
Lester, Jim (Beeston)


Fairgrieve, Russell
Lewis, Kenneth (Rutland)


Faith, Mrs Sheila
Lloyd, Peter (Fareham)


Farr, John
Loveridge, John


Fell, Anthony
Luce, Richard


Fenner, Mrs Peggy
Lyell, Nicholas


Finsberg, Geoffrey
McCrindle, Robert


Fisher, Sir Nigel
Macfarlane, Neil


Fletcher, A. (Ed'nb'gh N)
MacGregor, John


Fletcher-Cooke, Sir Charles
MacKay, John (Argyll)


Fookes, Miss Janet
Macmillan, Rt Hon M.


Forman, Nigel
McNair-Wilson, M. (N'bury)


Fowler, Rt Hon Norman
McNair-Wilson, P. (New F'st)


Fox, Marcus
McQuarrie, Albert


Fraser, Rt Hon Sir Hugh
Madel, David


Fraser, Peter (South Angus)
Major, John


Galbraith, Hon T. G. D.
Marland, Paul


Gardiner, George (Reigate)
Marlow, Tony


Gardner, Edward (S Fylde)
Marshall, Michael (Arundel)


Garel-Jones, Tristan
Marten, Neil (Banbury)


Gilmour, Rt Hon Sir Ian
Mates, Michael


Glyn, Dr Alan
Mather, Carol


Goodhart, Philip
Maude, Rt Hon Sir Angus


Goodhew, Victor
Mawby, Ray


Goodlad, Alastair
Mawhinney, Dr Brian


Gorst, John
Maxwell-Hyslop, Robin


Gow, Ian
Mayhew, Patrick


Gower, Sir Raymond
Mellor, David


Grant, Anthony (Harrow C)
Meyer, Sir Anthony


Gray, Hamish
Miller, Hal (B'grove)


Greenway, Harry
Mills, Iain (Meriden)


Grieve, Percy
Mills, Peter (West Devon)


Griffiths, E.(B'y St. Edm'ds)
Miscampbell, Norman


Griffiths, Peter (Portsm'th N)
Moate, Roger


Grist, Ian
Monro, Hector


Grylls, Michael
Montgomery, Fergus


Gummer, John Selwyn
Moore, John


Hamilton, Hon A.
Morgan, Geraint


Hamilton, Michael (Salisbury)
Morris, M. (N'hampton S)


Hampson, Dr Keith
Morrison, Hon C. (Devizes)


Hannam, John
Morrison, Hon P. (Chester)


Haselhurst, Alan
Mudd, David


Havers, Rt Hon Sir Michael
Murphy, Christopher


Hawkins, Paul
Myles, David


Hawksley, Warren
Neale, Gerrard


Hayhoe, Barney
Needham, Richard


Heath, Rt Hon Edward
Neubert, Michael






Newton, Tony
Spicer, Jim (West Dorset)


Normanton, Tom
Spicer, Michael (S Worcs)


Onslow, Cranley
Sproat, Iain


Oppenheim, Rt Hon Mrs S.
Squire, Robin


Osborn, John
Stainton, Keith


Page, John (Harrow, West)
Stanbrook, Ivor


Page, Rt Hon Sir G. (Crosby)
Stanley, John


Page, Richard (SW Herts)
Steen, Anthony


Parkinson, Cecil
Stevens, Martin


Parris, Matthew
Stewart, Ian (Hitchin)


Patten, Christopher (Bath)
Stewart, A.(E Renfrewshire)


Patten, John (Oxford)
Stokes, John


Pattie, Geoffrey
Stradling Thomas, J.


Pawsey, James
Tapsell, Peter


Percival, Sir Ian
Taylor, Teddy (S'end E)


Peyton, Rt Hon John
Temple-Morris, Peter


Pink, R. Bonner
Thomas, Rt Hon Peter


Pollock, Alexander
Thompson, Donald


Prentice, Rt Hon Reg
Thorne, Neil (Ilford South)


Price, Sir David (Eastleigh)
Thornton, Malcolm


Prior, Rt Hon James
Townend, John (Bridlington)


Proctor, K. Harvey
Townsend, Cyril D, (B'heath)


Pym, Rt Hon Francis
Trippier, David


Rathbone, Tim
Trotter, Neville


Rees, Peter (Dover and Deal)
van Straubenzee, W. R.


Rees-Davies, W. R.
Vaughan, Dr Gerard


Renton, Tim
Viggers, Peter


Rhodes James, Robert
Waddington, David


Rhys Williams, Sir Brandon
Wakeham, John


Ridley, Hon Nicholas
Waldegrave, Hon William


Ridsdale, Sir Julian
Walker, B. (Perth )


Rifkind, Malcolm
Wall, Patrick


Roberts, M. (Cardiff NW)
Walters, Dennis


Roberts, Wyn (Conway)
Ward, John


Rossi, Hugh
Warren, Kenneth


Rost, Peter
Watson, John


Royle, Sir Anthony
Wells, John (Maidstone)


St. John-Stevas, Rt Hon N.
Wells, Bowen


Scott, Nicholas
Wheeler, John


Shaw, Giles (Pudsey)
Whitney, Raymond


Shaw, Michael (Scarborough)
Wickenden, Keith


Shelton, William (Streatham)
Wiggin, Jerry


Shepherd, Colin (Hereford)
Williams, D.(Montgomery)


Shepherd, Richard
Winterton, Nicholas


Shersby, Michael
Wolfson, Mark


Silvester, Fred
Young, Sir George (Acton)


Sims, Roger
Younger, Rt Hon George


Skeet, T. H. H.



Speed, Keith
Tellers for the Ayes:


Speller, Tony
Mr. Spencer Le Marchant and


Spence, John
Mr. Anthony Berry.




NOES


Abse, Leo
Carter-Jones, Lewis


Adams, Allen
Clark, Dr David (S Shields)


Allaun, Frank
Cocks, Rt Hon M. (B'stol S)


Alton, David
Cohen, Stanley


Anderson, Donald
Coleman, Donald


Archer, Rt Hon Peter
Concannon, Rt Hon J. D.


Ashley, Rt Hon Jack
Cook, Robin F.


Ashton, Joe
Cowans, Harry


Atkinson, N.(H'gey,)
Cox, T. (W'dsw'th, Toot'g)


Barnett, Guy (Greenwich)
Craigen, J. M. (G'gow, M'hill)


Barnett, Rt Hon Joel (H'wd)
Crowther, Stan


Beith, A. J.
Cryer, Bob


Benn, Rt Hon Tony
Cunliffe, Lawrence


Bennett, Andrew(St'kp't N)
Cunningham, G. (Islington S)


Bidwell, Sydney
Cunningham, Dr J. (W'h'n)


Booth, Rt Hon Albert
Dalyell, Tam


Boothroyd, Miss Betty
Davidson, Arthur


Bottomley, Rt Hon A.(M'b'ro)
Davies, Rt Hon Denzil (L'lli)


Bray, Dr Jeremy
Davis, Clinton (Hackney C)


Brocklebank-Fowler, C.
Davis, Terry (B'ham, Stechf'd)


Brown, Hugh D. (Provan)
Deakins, Eric


Brown, R. C. (N'castle W)
Dean, Joseph (Leeds West)


Brown, Ronald W. (H'ckn'y S)
Dempsey, James


Buchan, Norman
Dewar, Donald


Callaghan, Jim (Midd't'n &amp; P)
Dixon, Donald


Campbell-Savours, Dale
Dobson, Frank


Canavan, Dennis
Dormand, Jack





Douglas-Mann, Bruce
McElhone, Frank


Dubs, Alfred
McKelvey, William


Duffy, A. E. P.
MacKenzie, Rt Hon Gregor


Dunn, James A.
Maclennan, Robert


Dunnett, Jack
McMahon, Andrew


Dunwoody, Hon Mrs G.
McNally, Thomas


Eadie, Alex
McNamara, Kevin


Eastham, Ken
McTaggart, Robert


Edwards, R. (W'hampt'n S E)
Magee, Bryan


Ellis, R. (NE D'bysh're)
Marks, Kenneth


English, Michael
Marshall, D (G'gow S'ton)


Ennals, Rt Hon David
Marshall, Dr Edmund (Goole)


Evans, Ioan (Aberdare)
Marshall, Jim (Leicester S)


Evans, John (Newton)
Mason, Rt Hon Roy


Ewing, Harry
Maxton, John


Faulds, Andrew
Maynard, Miss Joan


Field, Frank
Meacher, Michael


Flannery, Martin
Mellish, Rt Hon Robert


Fletcher, Raymond (Ilkeston)
Mikardo, Ian


Fletcher, Ted (Darlington)
Millan, Rt Hon Bruce


Foot, Rt Hon Michael
Miller, Dr M. S. (E Kilbride)


Forrester, John
Mitchell, Austin (Grimsby)


Foster, Derek
Mitchell, R. C. (Soton Itchen)


Foulkes, George
Morris, Rt Hon A. (W'shawe)


Fraser, J. (Lamb'th, N'w'd)
Morris, Rt Hon C. (O'shaw)


Freeson, Rt Hon Reginald
Morris, Rt Hon J. (Aberavon)


Garrett, W. E. (Wallsend)

Morton, George


George, Bruce
Moyle, Rt Hon Roland


Gilbert, Rt Hon Dr John
Mulley, Rt Hon Frederick


Ginsburg, David
Newens, Stanley


Golding, John
Oakes, Rt Hon Gordon


Graham, Ted
O'Halloran, Michael


Grant, George (Morpeth)
O'Neill, Martin


Grant, John (Islington C)
Orme, Rt Hon Stanley


Hamilton, James (Bothwell)
Owen, Rt Hon Dr David


Hamilton, W. W. (C'tral Fife)
Palmer, Arthur


Hardy, Peter
Park, George


Harrison, Rt Hon Walter
Parker, John


Hart, Rt Hon Dame Judith
Pendry, Tom


Hattersley, Rt Hon Roy
Penhaligon, David


Healey, Rt Hon Denis
Powell, Raymond (Ogmore)


Heffer, Eric S.
Prescott, John


Hogg, N. (E Dunb't'nshire)
Radice, Giles


Holland, S. (L'b'th, Vauxh'll)
Rees, Rt Hon M (Leeds S)


Home Robertson, John
Richardson, Jo


Homewood, William
Roberts, Albert (Normanton)


Hooley, Frank
Roberts, Allan (Bootle)


Howell, Rt Hon D.
Roberts, Ernest (Hackney N)


Hoyle, Douglas
Roberts, Gwilym (Cannock)


Huckfield, Les
Robertson, George


Hughes, Mark (Durham)
Robinson, G. (Coventry NW)


Hughes, Robert (Aberdeen N)
Rodgers, Rt Hon William


Hughes, Roy (Newport)
Roper, John


Janner, Hon Greville
Ross, Ernest (Dundee West)


Jay, Rt Hon Douglas
Rowlands, Ted


Johnson, James (Hull West)
Ryman, John


Johnson, Walter (Derby S)
Sever, John


Johnston, Russell (Inverness)
Sheerman, Barry


Jones, Rt Hon Alec (Rh'dda)
Sheldon, Rt Hon R.


Jones, Barry (East Flint)
Shore, Rt Hon Peter


Jones, Dan (Burnley)
Short, Mrs Renée


Kaufman, Rt Hon Gerald
Silkin, Rt Hon J. (Deptford)


Kerr, Russell
Silkin, Rt Hon S. C. (Dulwich)


Kilfedder, James A.
Silverman, Julius


Kilroy-Silk, Robert
Skinner, Dennis


Kinnock, Neil
Smith, Cyril (Rochdale)


Lambie, David
Smith, Rt Hon J. (N Lanark)


Lamond, James
Snape, Peter


Leadbitter, Ted
Soley, Clive


Leighton, Ronald
Spearing, Nigel


Lestor, Miss Joan
Spriggs, Leslie


Lewis, Arthur (N'ham NW)
Stallard, A. W.


Lewis, Ron (Carlisle)
Steel, Rt Hon David


Litherland, Robert
Stewart, Rt Hon D. (W Isles)


Lofthouse, Geoffrey
Stoddart, David


Lyon, Alexander (York)
Stott, Roger


Lyons, Edward (Bradf'd W)
Strang, Gavin


Mabon, Rt Hon Dr J. Dickson
Summerskill, Hon Dr Shirley


McCartney, Hugh
Taylor, Mrs Ann (Bolton W)


McDonald, Dr Oonagh
Thomas, Dafydd (Merioneth)






Thomas, Jeffrey (Abertillery)
Whitlock, William


Thomas, Dr R.(Carmarthen)
Willey, Rt Hon Frederick


Thorne, Stan (Preston South)
Williams, Rt Hon A.(S'sea W)


Tinn, James
Wilson, Gordon (Dundee E)


Torney, Tom
Wilson, Rt Hon Sir H.(H'ton)


Urwin, Rt Hon Tom
Wilson, William (C'try SE)


Varley, Rt Hon Eric G.
Winnick, David


Wainwright, E.(Dearne V)
Woodall, Alec


Wainwright, R.(Colne V)
Woolmer, Kenneth


Walker, Rt Hon H.(D'caster)
Wright, Sheila


Watkins, David
Young, David (Bolton E)


Weetch, Ken



Welsh, Michael
Tellers for the Noes:


White, Frank R.
Mr. Frank Haynes and


White, J. (G'gow Pollok)
Mr. Allen McKay.


Whitehead, Philip

Question accordingly agreed to.

Motion made, and Question put,
That the Report on the Rate Support Grant Reduction (Dundee and Stirling Districts) 1981–82, a copy of which was laid before this House on 10th July, in respect of Stirling District, be approved.—[Mr. Younger.]

The House divided: Ayes 301, Noes 241.

Division No. 284]
[10.28 pm


AYES


Adley, Robert
Churchill, W. S.


Aitken, Jonathan
Clark, Hon A. (Plym'th, S'n)


Alexander, Richard
Clark, Sir W. (Croydon S)


Alison, Michael
Clarke, Kenneth (Rushcliffe)


Amery, Rt Hon Julian
Clegg, Sir Walter


Ancram, Michael
Cockeram, Eric


Arnold, Tom
Colvin, Michael


Aspinwall, Jack
Cope, John


Atkins, Rt Hon H.(S'thorne)
Cormack, Patrick


Atkins, Robert(Preston N)
Corrie, John


Atkinson, David (B'm'th,E)
Costain, Sir Albert


Baker, Kenneth(St.M'bone)
Cranborne, Viscount


Baker, Nicholas (N Dorset)
Critchley, Julian


Banks, Robert
Crouch, David


Beaumont-Dark, Anthony
Dean, Paul (North Somerset)


Bendall, Vivian
Dickens, Geoffrey


Bennett, Sir Frederic (T'bay)
Douglas-Hamilton, Lord J.


Benyon, Thomas (A'don)
du Cann, Rt Hon Edward


Benyon, W. (Buckingham)
Dunn, Robert (Dartford)


Best, Keith
Durant, Tony


Bevan, David Gilroy
Dykes, Hugh


Biffen, Rt Hon John
Eden, Rt Hon Sir John


Biggs-Davison, John
Edwards, Rt Hon N. (P'broke)


Blackburn, John
Eggar, Tim


Blaker, Peter
Elliott, Sir William


Body, Richard
Eyre, Reginald


Bonsor, Sir Nicholas
Fairgrieve, Russell


Boscawen, Hon Robert
Faith, Mrs Sheila


Bottomley, Peter (W'wich W)
Farr, John


Bowden, Andrew
Fell, Anthony


Boyson, Dr Rhodes
Fenner, Mrs Peggy


Braine, Sir Bernard
Finsberg, Geoffrey


Bright, Graham
Fisher, Sir Nigel


Brinton, Tim
Fletcher, A. (Ed'nb'gh N)


Brittan, Leon
Fletcher-Cooke, Sir Charles


Brooke, Hon Peter
Fookes, Miss Janet


Brotherton, Michael
Forman, Nigel


Brown, Michael(Brigg &amp; Sc'n)
Fowler, Rt Hon Norman


Browne, John (Winchester)
Fox, Marcus


Bruce-Gardyne, John
Fraser, Rt Hon Sir Hugh


Bryan, Sir Paul
Fraser, Peter (South Angus)


Buck, Antony
Galbraith, Hon T. G. D.


Budgen, Nick
Gardiner, George (Reigate)


Bulmer, Esmond
Gardner, Edward (S Fylde)


Burden, Sir Frederick
Garel-Jones, Tristan


Butcher, John
Gilmour, Rt Hon Sir Ian


Cadbury, Jocelyn
Glyn, Dr Alan


Carlisle, John (Luton West)
Goodhart, Philip


Carlisle, Kenneth (Lincoln)
Goodhew, Victor


Chalker, Mrs. Lynda
Goodlad, Alastair


Channon, Rt. Hon. Paul
Gorst, John


Chapman, Sydney
Gow, Ian





Gower, Sir Raymond
Meyer, Sir Anthony


Grant, Anthony (Harrow C)
Miller, Hal (B'grove)


Gray, Hamish
Mills, Iain (Meriden)


Greenway, Harry
Mills, Peter (West Devon)


Grieve, Percy
Miscampbell, Norman


Griffiths, E.(B'y St. Edm'ds)
Moate, Roger


Griffiths, Peter (Portsm'th N)
Monro, Hector


Grist, Ian
Montgomery, Fergus


Grylls, Michael
Moore, John


Gummer, John Selwyn
Morgan, Geraint


Hamilton, Hon A.
Morris, M. (N'hampton S)


Hamilton, Michael (Salisbury)
Morrison, Hon C. (Devizes)


Hampson, Dr Keith
Morrison, Hon P. (Chester)


Hannam, John
Mudd, David


Haselhurst, Alan
Murphy, Christopher


Havers, Rt Hon Sir Michael
Myles, David


Hawkins, Paul
Neale, Gerrard


Hawksley, Warren
Needham, Richard


Hayhoe, Barney
Neubert, Michael


Heath, Rt Hon Edward
Newton, Tony


Heddle, John
Normanton, Tom


Henderson, Barry
Onslow, Cranley


Hicks, Robert
Oppenheim, Rt Hon Mrs S.


Higgins, Rt Hon Terence L.
Osborn, John


Hogg, Hon Douglas (Gr'th'm)
Page, John (Harrow, West)


Holland, Philip (Carlton)
Page, Rt Hon Sir G. (Crosby)


Hooson, Tom
Page, Richard (SW Herts)


Hordern, Peter
Parkinson, Cecil


Howell, Rt Hon D. (G'ldf'd)
Parris, Matthew


Howell, Ralph (N Norfolk)
Patten, Christopher (Bath)


Hunt, John (Ravensbourne)
Patten, John (Oxford)


Hurd, Hon Douglas
Pattie, Geoffrey


Irving, Charles (Cheltenham)
Pawsey, James


Jenkin, Rt Hon Patrick
Percival, Sir Ian


Jessel, Toby
Peyton, Rt Hon John


Johnson Smith, Geoffrey
Pink, R. Bonner


Jopling, Rt Hon Michael
Pollock, Alexander


Joseph, Rt Hon Sir Keith
Prentice, Rt Hon Reg


Kaberry, Sir Donald
Price, Sir David (Eastleigh)


Kellett-Bowman, Mrs Elaine
Prior, Rt Hon James


Kershaw, Anthony
Proctor, K. Harvey


Kimball, Marcus
Pym, Rt Hon Francis


King, Rt Hon Tom
Rathbone, Tim


Kitson, Sir Timothy
Rees, Peter (Dover and Deal)


Knox, David
Rees-Davies, W. R.


Lamont, Norman
Renton, Tim


Lang, Ian
Rhodes James, Robert


Langford-Holt, Sir John
Rhys Williams, Sir Brandon


Latham, Michael
Ridley, Hon Nicholas


Lawrence, Ivan
Ridsdale, Sir Julian


Lawson, Rt Hon Nigel
Rifkind, Malcolm


Lee, John
Roberts, M. (Cardiff NW)


Lennox-Boyd, Hon Mark
Roberts, Wyn (Conway)


Lester, Jim (Beeston)
Rossi, Hugh


Lewis, Kenneth (Rutland)
Rost, Peter


Lloyd, Peter (Fareham)
Royle, Sir Anthony


Loveridge, John
St. John-Stevas, Rt Hon N.


Luce, Richard
Scott, Nicholas


Lyell, Nicholas
Shaw, Giles (Pudsey)


McCrindle, Robert
Shaw, Michael (Scarborough)


Macfarlane, Neil
Shelton, William (Streatham)


MacGregor, John
Shepherd, Colin (Hereford)


MacKay, John (Argyll)
Shepherd, Richard


Macmillan, Rt Hon M.
Shersby, Michael


McNair-Wilson, M. (N'bury)
Silvester, Fred


McNair-Wilson, P. (New F'st)
Sims, Roger


McQuarrie, Albert
Skeet, T. H. H.


Madel, David
Speed, Keith


Major, John
Speller, Tony


Marland, Paul
Spence, John


Marlow, Tony
Spicer, Jim (West Dorset)


Marshall, Michael (Arundel)
Spicer, Michael (S Worcs)


Marten, Neil (Banbury)
Sproat, Iain


Mates, Michael
Squire, Robin


Mather, Carol
Stainton, Keith


Maude, Rt Hon Sir Angus
Stanbrook, Ivor


Mawhinney, Dr Brian
Stanley, John


Maxwell-Hyslop, Robin
Steen, Anthony


Mayhew, Patrick
Stevens, Martin


Mellor, David
Stewart, Ian (Hitchin)






Stewart, A.(E Renfrewshire)
Wall, Patrick


Stokes, John
Walters, Dennis


Stradling Thomas, J.
Ward, John


Tapsell, Peter
Warren, Kenneth


Taylor, Teddy (S'end E)
Watson, John


Temple-Morris, Peter
Wells, John (Maidstone)


Thomas, Rt Hon Peter
Wells, Bowen


Thompson, Donald
Wheeler, John


Thorne, Neil (Ilford South)
Whitney, Raymond


Thornton, Malcolm
Wickenden, Keith


Townend, John (Bridlington)
Wiggin, Jerry


Townsend, Cyril D, (B'heath)
Williams, D.(Montgomery)


Trippier, David
Winterton, Nicholas


Trotter, Neville
Wolfson, Mark


van Straubenzee, W. R.
Young, Sir George (Acton)


Vaughan, Dr Gerard
Younger, Rt Hon George


Viggers, Peter



Waddington, David
Tellers for the Ayes:


Wakeham, John
Mr. Spencer Le Marchant and


Waldegrave, Hon William
Mr. Anthony Berry.


Walker, B. (Perth)





NOES


Abse, Leo
Dormand, Jack


Adams, Allen
Douglas-Mann, Bruce


Allaun, Frank
Dubs, Alfred


Alton, David
Duffy, A. E. P.


Anderson, Donald
Dunn, James A.


Archer, Rt Hon Peter
Dunnett, Jack


Ashley, Rt Hon Jack
Dunwoody, Hon Mrs G.


Ashton, Joe
Eadie, Alex


Atkinson, N.(H gey,)
Eastham, Ken


Barnett, Guy (Greenwich)
Edwards, R. (W'hampt'n S E)


Barnett, Rt Hon Joel (H'wd)
Ellis, R. (NE D'bysh're)


Beith, A. J.
English, Michael


Benn, Rt Hon A. Wedgwood
Ennals, Rt Hon David


Bennett, Andrew(St'kp't N)
Evans, Ioan (Aberdare)


Bidwell, Sydney
Evans, John (Newton)


Booth, Rt Hon Albert
Ewing, Harry


Boothroyd, Miss Betty
Faulds, Andrew


Bottomley, Rt Hon A.(M'b'ro)
Field, Frank


Bray, Dr Jeremy
Flannery, Martin


Brocklebank-Fowler, C.
Fletcher, Raymond (Ilkeston)


Brown, Hugh D. (Provan)
Fletcher, Ted (Darlington)


Brown, R. C. (N' castle W)
Foot, Rt Hon Michael


Brown, Ronald W. (H'ckn'y S)
Forrester, John


Buchan, Norman
Foster, Derek


Callaghan, Jim (Midd't'n &amp; P)
Foulkes, George


Campbell-Savours, Dale
Fraser, J. (Lamb'th, N'w'd)


Canavan, Dennis
Freeson, Rt Hon Reginald


Carter-Jones, Lewis
Garrett, W. E. (Wallsend)


Clark, Dr David (S Shields)
George, Bruce


Cocks, Rt Hon M. (B'stol S)
Gilbert, Rt Hon Dr John


Cohen, Stanley
Ginsburg, David


Coleman, Donald
Golding, John


Concannon, Rt Hon J. D.
Graham, Ted


Conlan, Bernard
Grant, George (Morpeth)


Cook, Robin F.
Grant, John (Islington C)


Cowans, Harry
Hamilton, James (Bothwell)


Cox, T. (W'dsW'th, Toot'g)
Hamilton, W. W. (C'tral Fife)


Craigen, J. M.
Hardy, Peter


Crowther, J. S.
Harrison, Rt Hon Walter


Cryer, Bob
Hart, Rt Hon Dame Judith


Cunliffe, Lawrence
Hattersley, Rt Hon Roy


Cunningham, G. (Islington S)
Haynes, Frank


Cunningham, Dr J. (W'h'n)
Healey, Rt Hon Denis


Dalyell, Tam
Heffer, Eric S.


Davidson, Arthur
Hogg, Hon Douglas (Gr'th'm)


Davis, Clinton (Hackney C)
Holland, S. (L'b'th, Vauxh'll)


Davis, T. (B'ham, Stechf'd)
Home Robertson, John


Deakins, Eric
Homewood, William


Dempsey, James
Hooley, Frank


Dewar, Donald
Howell, Rt Hon D.


Dixon, Donald
Hoyle, Douglas


Dobson, Frank
Huckfield, Les





Hughes, Mark (Durham)
Prescott, John


Hughes, Robert (Aberdeen N)
Radice, Giles


Hughes, Roy (Newport)
Rees, Rt Hon M (Leeds S)


Janner, Hon Greville
Richardson, Jo


Jay, Rt Hon Douglas
Roberts, Albert (Normanton)


Johnson, James (Hull West)
Roberts, Allan (Bootle)


Johnson, Walter (Derby S)
Roberts, Ernest (Hackney N)


Johnston, Russell (Inverness)
Roberts, Gwilym (Cannock)


Jones, Rt Hon Alec (Rh'dda)
Robertson, George


Jones, Barry (East Flint)
Robinson, G. (Coventry NW)


Jones, Dan (Burnley)
Rodgers, Rt Hon William


Kaufman, Rt Hon Gerald
Roper, John


Kerr, Russell
Ross, Ernest (Dundee West)


Kilfedder, James A.
Rowlands, Ted


Kilroy-Silk, Robert
Ryman, John


Kinnock, Neil
Sandelson, Neville


Lambie, David
Sever, John


Lamond, James
Sheerman, Barry


Leadbitter, Ted
Sheldon, Rt Hon R.


Leighton, Ronald
Shore, Rt Hon Peter


Lestor, Miss Joan
Short, Mrs Renée


Lewis, Arthur (N'ham NW)
Silkin, Rt Hon J. (Deptford)


Lewis, Ron (Carlisle)
Silkin, Rt Hon S. C. (Dulwich)


Litherland, Robert
Silverman, Julius


Lofthouse, Geoffrey
Skinner, Dennis


Lyon, Alexander (York)
Smith, Cyril (Rochdale)


Lyons, Edward (Bradf'd W)
Smith, Rt Hon J. (N Lanark)


Mabon, Rt Hon Dr J. Dickson
Snape, Peter


McCartney, Hugh
Soley, Clive


McDonald, Dr Oonagh
Spearing, Nigel


McElhone, Frank
Spriggs, Leslie


McKay, Allen (Penistone)
Stallard, A. W.


McKelvey, William
Steel, Rt Hon David


MacKenzie, Rt Hon Gregor
Stewart, Rt Hon D. (W Isles)


Maclennan, Robert
Stoddart, David


McMahon, Andrew
Strang, Gavin


McNally, Thomas
Summerskill, Hon Dr Shirley


McNamara, Kevin
Taylor, Mrs Ann (Bolton W)


McTaggart, Robert
Thomas, Dafydd (Merioneth)


Magee, Bryan
Thomas, Jeffrey (Abertillery)


Marks, Kenneth
Thomas, Dr R.(Carmarthen)


Marshall, D(G'gow S'ton)
Thorne, Stan (Preston South)


Marshall, Dr Edmund (Goole)
Tinn, James


Marshall, Jim (Leicester S)
Torney, Tom


Mason, Rt Hon Roy
Urwin, Rt Hon Tom


Maxton, John
Varley, Rt Hon Eric G.


Maynard, Miss Joan
Wainwright, E.(Dearne V)


Meacher, Michael
Wainwright, R.(Colne V)


Mellish, Rt Hon Robert
Walker, Rt Hon H.(D'caster)


Mikardo, Ian
Watkins, David


Millan, Rt Hon Bruce
Weetch, Ken


Miller, Dr M. S. (E Kilbride)
Welsh, Michael


Mitchell, Austin (Grimsby)
White, Frank R.


Mitchell, R. C. (Soton Itchen)
White, J. (G'gow Pollok)


Morris, Rt Hon A. (W'shawe)
Whitehead, Phillip


Morris, Rt Hon C. (O'shaw)
Whitlock, William


Morris, Rt Hon J. (Aberavon)
Willey, Rt Hon Frederick


Moyle, Rt Hon Roland
Williams, Rt Hon A.(S'sea W)


Mulley, Rt Hon Frederick
Wilson, Gordon (Dundee E)


Newens, Stanley
Wilson, Rt Hon Sir H.(H'ton)


Oakes, Rt Hon Gordon
Wilson, William (C'try SE)


O'Halloran, Michael
Winnick, David


O'Neill, Martin
Woodall, Alec


Orme, Rt Hon Stanley
Woolmer, Kenneth


Owen, Rt Hon Dr David
Wright, Sheila


Palmer, Arthur
Young, David (Bolton E)


Park, George



Parker, John
Tellers for the Noes:


Pendry, Tom
Mr. Joseph Dean and


Penhaligon, David
Mr. George Morton.


Powell, Raymond (Ogmore)

Question accordingly agreed to.

Orders of the Day — Western Ferries (Argyll) Ltd.

The Secretary of State for Scotland (Mr. George Younger): I beg to move,
That the draft Undertaking between the Secretary of State for Scotland and Western Ferries (Argyll) Limited, which was laid before this House on 10 July, be approved.
As hon. Members will be aware, this Government came to office with a clear manifesto commitment to ensure the survival and prosperity of Scotland's island communities whose livelihood depends on the profitability of many small businesses. In this we recognised the importance of sea transport costs. We undertook to re-examine the structure of the subsidies and said that we were prepared to increase them in real terms as part of the process of moving closer to road equivalent tariffs. In pursuing that aim, we have mounted a large-scale consultation on the future form of ferry charges and of Government assistance generally. We have also—and this is of immediate practical importance—extended the area covered by assistance and the total amount of assistance being paid. The latter has now increased to around £9·5 million in the current financial year compared with the £4·3 million committed for 1979–80 by the Labour Government. Our extensions of assistance mean that more is now being paid out to help in real terms than before.
Substantial reductions in fares are now available on the main roll-on/roll-off services to Orkney and Shetland and on services taking most of the bulk of freight to and from the Scottish islands. Particularly during a period of severe public expenditure constraint, these steps have demonstrated a considerable commitment and have been warmly welcomed by the island communities. It is my intention to go a stage further by introducing extensions of assistance in the bulk shipping field through undertakings which will be considered by the House tomorrow. I also intend to make a statement on the results of the consultation on road equivalent tariffs before the Summer Recess.
It has, however, been clear to the Government that help should be given not only by increasing Government financial assistance but by ensuring that assistance is going to the most cost-effective services. The large subsidy being paid to Caledonian MacBrayne on the Gourock-Dunoon route—peaking at over £800,000 in 1980 and still forecast at £500,000 to cover a reduced 1981 service—came under early scrutiny when we were preparing our consultative paper on sea transport to the Scottish islands in March 1980.
In the paper we stated:
It is intended that negotiations take place with Western Ferries and Caledonian MacBrayne with a view to creating a situation on the Gourock—Dunoon service where both companies set commercial rates with Government assistance giving them the same percentage reduction in these rates.
It has become clear that to subsidise two directly competing services would be financially wasteful and would restrict the amount of Government assistance available on other Scottish routes.
Accordingly, discussions with Western Ferries were held on the basis of their becoming sole operator. The undertaking before the House tonight is the result of those discussions. Its basic objective is to give a fair deal to the private operator, provide a satisfactory service and to

release for use elsewhere Government assistance that is currently committed to this route. To ensure a satisfactory service, the Scottish Transport Users Consultative Committee will be considering the formal proposed withdrawal now submitted to it by Cal-Mac. The Committee's recommendations will be before me before a final decision is taken on the withdrawal of assistance.
There are several reasons for my proposed changes. Cal-Mac's deficit on the route reached £800,000 in 1980.

Dr. J. Dickson Mabon: The right hon. Gentleman is repeating what he said in a letter to me, namely, that losses were approximately £800,000 "on the route". Is it on the route or on the routes, because some people contest that £800,000 is spent only on the Gourock to Dunoon service?

Mr. Younger: That was the peak figure on that route. That occurred in 1980, and I am glad to say that the figure is now not that much. It is just over £500,000. It is still a substantial sum which we are anxious to see used to the best effect.
The loss is borne by the taxpayer and if it is used on that service it cannot be used to help services to the more remote island communities. The Government would be failing in their duty if they did not at least attempt to reduce such a level of assistance concentrated on one route. It is also clear that Western Ferries have, over the years, increased their share of the market in the face of heavily subsidised competition, to a point where they are carrying two-thirds of the total car traffic on the route and one-third of the passenger and commercial carryings—and that is without any subsidy and against a competitor which is subsidised to the extent of £500,000.
Western Ferries' present operations on the route have also been profitable, albeit marginally so, over the past few years. We believe that the success of a commercial operation on the service would be to the benefit of both users and taxpayers.

Mr. George Robertson: The Secretary of State said that the ferries carry one-third of the passenger and commercial traffic. Will he break that down? How much is passenger traffic and how much commercial traffic? I do not believe that they are compatible. The difference between lorries and people is quite distinct and crucial.

Mr. Younger: I shall try to give the hon. Gentleman some idea of the figures, although there are a number of them. In 1980 the percentage share of passengers for Caledonian MacBrayne on the Gourock-Dunoon route was 66 per cent. and the share for Western Ferries was 34 per cent. For cars the figures were 36 per cent. for Caledonian MacBrayne and 64 per cent. for Western Ferries. I could give the hon. Gentleman the figures for other years. If he wants to ask any further questions, either my hon. Friend or I will try to answer them.
At present Western Ferries operates three vehicle ferries between its terminals at McInroy's Point, two miles south of Gourock, and Hunter's Quay, two miles North of Dunoon. This crossing is about half the distance of that operated by the Caledonian MacBrayne services. It is a low-cost operation. However, the withdrawal of the Caledonian MacBrayne facilities will put its existing capacity under some strain. The first major feature of the undertaking is therefore a capital grant for a new vessel.


The undertaking would enable me to pay a capital grant to Western Ferries of up to £300,000 towards the cost of acquiring one roll-on/roll-off vessel for use in augmenting the vehicle ferry service between McInroy's Point and Hunter's Quay. This should allow all the vehicle traffic wishing to cross to be easily accommodated.
There is also a heavy, although steadily diminishing, passenger traffic between Gourock and Dunoon. To enable Western Ferries to carry this traffic, the undertaking provides that I may pay a revenue grant of up to £300,000 towards the costs incurred in the first year of operation of a passenger service by the high-speed catamaran "Highland Seabird". This would run between Gourock pier and Dunoon pier, and—for pedestrians—would be a direct replacement for the service now operated by Caledonian MacBrayne. The vessel "Highland Seabird" has accommodation for 160 passengers and can travel at a speed of 25 knots, thereby reducing the present journey time to about 12 minutes—half the present crossing time. The attractions of this service are obvious—[Interruption.]—even to the bon. Member for Dunbartonshire, East (Mr. Hogg).
In calculating the assistance to be paid, I will take into account the revenue that Western Ferries may receive for any other work undertaken by the vessel. The subsidy will not exceed £000,000, and there is no question of any further subsidy being required or paid in respect of any Western Ferries services after 30 September 1982. When compared with the heavy annual losses of Caledonian MacBrayne on the route, this represents a substantial saving in public expenditure which I anticipate could be achieved over a relatively short time.
I must also report to the House that in the negotiations with Western Ferries an agreement was reached on a further small measure of assistance, that is, 75 per cent. grant assistance towards pier improvements to accommodate the "Highland Seabird". These improvements are estimated to cost £20,000 gross. For technical reasons, they are not included in the undertaking, but it is right that I should inform the House about them now.
The Transport Users Consultative Committee for Scotland is bound by the Transport Acts of 1962 and 1968 to consider the proposed withdrawal of the Caledonian MacBrayne service. As I have already indicated, the Scottish Transport Group has given formal notice of such withdrawal. The committee may submit recommendations concerning the withdrawal to me for consideration. As I announced in reply to my hon. Friend the Member for Argyll (Mr. MacKay) on 30 June, it is my intention to consider the report of the committee before completing the undertaking with Western Ferries.

Mr. Norman Buchan: Will the Secretary of State give some thought to the continuity of the service? For example, he might recall that the company has recently decided to pull out of the Islay service. Is that a good harbinger for the future?

Mr. Younger: I shall give thought to that. I have no doubt that that will be raised at the hearings before the Transport Users Consultative Committee. I should have thought that the hon. Gentleman would regard the Islay service change as helpful because it will enable the Caledonian MacBrayne service to act more profitably—or at least less unprofitably. It is to be welcomed from that point of view. The service will, I hope, be satisfactory in future.
We are determined to press on in a practical way with assistance to shipping services in the Highlands and Islands area. Not even our sternest critics will say that we have been remiss in providing substantial improvements for the islands communities in the last two years. The undertaking, with those that are to be debated tomorrow, represent the next steps in a process designed to give--and it does give—greater assistance to the islands. I commend the undertaking.

Mr. Donald Dewar: We regard the undertaking as a rather squalid little business. The Secretary of State gave the impression that some of the remarks in his brief were being read by him for the first time. His reading was a little less fluent than usual.
The proposals that we are asked to endorse have a great deal to do with politics and prejudice and little to do with a better service for the travelling public. The Labour Party's overriding consideration in this matter is which operator, over a period and with a reasonable guarantee of continuity, will provide the most efficient and effective link for those who wish to move between Gourock and Dunoon. Our basic contention is that the proposition that public money should go to Western Ferries and that, in effect, Caledonian MacBrayne should be removed from the service, will put the efficient service for commuters and holidaymakers at risk.
It is common ground that the Western Ferries operation is not entirely suitable for a sole operation. The route from McInroy's Point to Hunter's Quay might be attractive for cars and other vehicles, but it is not attractive to pedestrians. Both terminals are well away from the main centre of population. It would be a disaster if the only service was that between McInroy's Point and Hunter's Quay. There is implicit recognition of that.

Mr. Younger: The place involved is McInroy's Point, not, as the hon. Gentleman seemed to say, "McEnroses' Point"—that is something different.

Mr. Dewar: I am sorry that the right hon. Gentleman objects to my accent and pronunciation. He comes from a different part of the education system and perhaps he has difficulty in understanding those who have spent all their lives in Scotland. I say that without a blush.
There is implicit recognition of the unsatisfactory nature of the arrangements for pedestrians in the proposal that the catamaran "Highland Seabird" should ply direct between Gourock and Dunoon. The Western Ferries craft plying on the route at present would not be suitable for the piers at Gourock and Dunoon, even if the piers were adapted in the minor way proposed.
For pedestrians we are relying entirely on the "Highland Seabird". There must be a question mark over the reliability and suitablility of the arrangements. For a start, it is clear from the answer given to the hon. Member for Argyll (Mr. MacKay) on 30 June that there is a possibility in the mind of the right hon. Gentleman that the "Highland Seabird" service—the pedestrian service from Princes pier to Dunoon—may not turn out to be financially viable. Let me quote a key sentence:
If for any reason Western Ferries is unable to continue the `Highland Seabird' service, pedestrians will be taken on a through bus between Gourock and Dunoon by way of McInroy's Point and Hunter's Quay."—[Official Report, 30 June 1981; Vol. 7, c. 336.]


That is a very complacent attitude. It is a totally unacceptable proposition to anyone interested in the ferry and would be against the interests of those who use it. If the Secretary of State is genuinely positing as a possibility that the "Highland Seabird" may not be viable and may be withdrawn, the service provided by Western Ferries would be totally unacceptable.
On the advice that I have been able to get, there is every possibility that the "Highland Seabird" service will not be economic. At the end of the day it carries 160 passengers, but it is a new boat with high depreciation and fuel costs, and it carries a crew of six or seven. There is also the question of what happens if it is in need of repair. I am told that it has experienced unreliability, admittedly in the upper Clyde, in recent seasons. It is a thin-hulled craft, liable to accidents with flotsam. In any event, any boat will need overhaul and repair on occasion, and it is anything but clear what the back-up arrangements will be for the pedestrian service between Gourock and Dunoon.
My hon. Friend the Member for Renfrewshire, West (Mr. Buchan) referred to Western Ferries, and we should look at experience on the Islay run. Only a week ago, in a mean-mannered way, Western Ferries announced withdrawal from the area because it is not financially viable. To leave the company as a monopoly operator on the Gourock-Dunoon route would be dangerous and risky for a Government with the interests of the commuters and others using the ferry at heart.
I do not want to make this a witch hunt, but we are entitled to look at Western Ferries' record, as we can discover it, to decide whether it is likely to give the continuity and financially sound base that should be available from a company taking on these responsibilities. Of course, we have not seen the company's financial returns for the year to September 1980. They should be available in the next week, or two weeks at the latest, but—perhaps conveniently—they are not at present. However, in the year to September 1979, it made a loss of £371,000 on a turnover of under £900,000. In the year before that, it was a loss of £139,000. Even someone as unskilled in accountancy as myself can see that the company has considerable financial problems. Indeed, it is being kept afloat—if that is not an unfortunate metaphor—by a £400,000 term loan that will have to be repaid.
I was astonished to hear the Secretary of State suggest that Western Ferries was profitable. I do not believe that losses of that size can be accounted for by the Islay run alone. It is a clear and irrefutable deduction that it is making substantial losses on the Dunoon-Gourock run. [Interruption.] Both Ministers shake their heads, but I have seen quotations from Mr. Andrew Wilson in which he estimates the loss on the Islay run. It was less than half the company's annual loss. As, to the best of my knowledge, the company operates only those two and one other very minor run, it seems almost inevitable, unless it is counting large losses on "Highland Seabird", that the company is not on a sound financial footing.
I say on behalf of all my hon. Friends that it is a very doubtful principle indeed that a company that is withdrawing from the Islay run because it cannot make it financially viable, a company that is clearly making substantial trading losses and is heavily in debt, should be

rescued—the Minister will hesitate to use that word—by public funds and be given a monopoly position on the route.

Mr. Younger: The hon. Gentleman is intentionally being unfair and misleading. On the Islay route Western Ferries has been competing against a vastly subsidised competitor, with no subsidy itself. On the Dunoon-Gourock route it has been doing the same, and has gained the lion's share of the market in most categories. The hon. Gentleman should have pointed that out. Western Ferries is doing extraordinarily well in being marginally profitable against a heavily subsidised competitor.

Mr. Dewar: The right hon. Gentleman may think that it is doing remarkably well in adverse circumstances, but I must look at the facts. If I am invited to consider the company as a long-term proposition to run public services, whether to make it a monopoly operator and whether its record inspires confidence, I am entitled to look at its balance sheet. Having done so, I remain wholly unconvinced. I am sceptical about the financial savings that may accrue to the public purse from the operation. The right hon. Gentleman was right to say that there was a peak loss to Caledonian MacBrayne of £800,000 on the route. This year the loss is down to £500,000. That represents some economies in ships and services. If the right hon. Gentleman thinks that there will be substantial savings, he may find that they turn out to be illusory.
Let us assume that one boat is taken out of service. If the "Juno" is sold and the "Jupiter" retained partly as a back-up boat for other Clyde services and for other reasons, the operating savings will be £628,000. Add to that savings on "Jupiter", which will not be in full service, of slightly under £90,000, and the fair estimates for savings on the shore terminal costs and administrative costs. That gives a total saving to Caledonian MacBrayne of £796,000. The route revenue was £803,000. On that basis there will be a small increase in the subsidy to Caledonian MacBrayne. The short-term and immediate costs—[Interruption.]—The Minister is shaking his head. I have gone into the matter carefully. I shall put forward a proposition that he can demolish, if he so wishes. The other one-off costs that will arise are also substantial. Sixty jobs will be lost, which will cost a considerable amount in redundancy payments. There will be a lay-up cost on the boat taken out of service of £30,000 or £40,000. There will be an unknown loss on the resale of the boat which was built in 1974. It will be difficult to sell as it is an estuarial design, built specifically for the route. It is not immediately attractive on the open market.

The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): The hon. Gentleman appears to be suggesting that the savings for Caledonian MacBrayne through not operating the route will be less than the revenue that it currently receives from it. If that is so, it suggests that it is currently operating the route at a profit. That would not explain the subsidy of £800,000 last year or £500,000 this year.

Mr. Dewar: The hon. Gentleman is not showing his normal clarity of thought. I made a careful proviso that my figures were on the basis that one boat was taken out of service and sold. There will be substantial savings of up to £500,000 if both boats are sold. No doubt the Minister will then feel that he is justified. But the roll-on effect on services on other parts of the Clyde will be considerable.
The Wemyss Bay-Rothesay route is presently plied by "Saturn". She is the only craft on that route. It is important that there is back-up available, expecially during weekends and the peak summer holiday period, from the Gourock-Dunoon run. If both boats are sold to achieve the apparent savings that the Minister wants, there will be a substantial decrease in the efficiency of the service as well as lost revenue on the Wemyss Bay-Rothesay route.
There are other spin-offs. For example, the Dunoon pier will not be used to anything like the same extent. The only operator plying from it will be "Highland Seabird", and there will be a considerable loss of revenue to the Strathclyde regional council, to say nothing of the small entrepreneur who bravely took over the franchise of the shops and entertainment complex on the pier on the basis of the Caledonian MacBrayne service.
The unfortunate Caledonian MacBrayne will be left to run a Gourock pier that it will not be using. The spin-offs are considerable. If only one boat goes, the savings will be negative. If both boats go, there will be a sad depletion of service that will have an effect on other routes apart from Gourock and Dunoon.
We are told that the revenue grant may not be available if Western Ferries Ltd. gets the Coulport contract. That is a Ministry of Defence contract to carry personnel to the nuclear site at Coulport. There is cause for suspicion when the Minister says that if a contract is awarded in a certain way it will save him money in providing a subsidy. The inference to be drawn is that it is extremely likely that it will be set up to ensure that Western Ferries gets the contract. That adds to the smell that hangs over this doubtful transaction.
We are presented with a doubtful bargain for the consumer. There are uncertain savings. There are wider arguments about principle that are extremely important. The Minister said that there has been consultation. There was no consultation with the unions that represent the 60 men who are likely to lose their jobs. There was no consultation with local interests in Dunoon. They are protesting long and loud in the local press about the lack of consultation. The Minister is being over-complacent in suggesting that there was adequate consultation.
The right hon. Gentleman represents the party of competition. I can understand the attractions of that theory. However, we are being presented with the creation of a monopoly. I concede that the arrival of Western Ferries has brought a form of competition that, in the short term, has been perhaps beneficial to the consumer because there has been cut-pricing. For example, Caledonian MacBrayne has one class of car instead of three classes for small, medium and large cars. It has concentrated on one part of the lower fare scale. There have been a number of advantages of that sort. However, it is now proposed to hand over the route to one operator which is hard pressed for cash and which will be in a position in future to hold the consumer to ransom. It will have no alternative operator to worry about. If that is the result of the imaginative policy-making of the party of competition, we live in a sad and topsy turvy world.
We object to public money being used for the rescuing of a company. At a time when we are discussing the road equivalent tariff—if we are to have a statement in the House, I presume that it will not be made on a day when Scottish Members have left the House because of the approaching recess—there is an acceptance that market mechanisms cannot dictate ferry services in a market of

this sort either on the Clyde or to the outer islands. I am not sure that it is right to aim for a commercial operation that makes a profit. If that is the measure of success, the consumer may well suffer at the end of the day.
When the Under-Secretary of State replies, I ask him to deal specifically with the Transport Users Consultative Committee's consultation. We know that it will be taken into account. May we have a firm undertaking that if the committee comes down against the change and says that Caledonian MacBrayne should remain on the route, we shall not have the undertaking implemented and the change forced through against local opinion and against the adivce of the committee?
The Secretary of State will remember that when he was Under-Secretary in the early 1970s exactly such a manouevre was suggested on the Islay routes. There was a suggestion that Western Ferries should get the subsidy for the Islay run, which it has just withdrawn. The TUCC came down against the move, and to be fair to the right hon. Member, when he was Under-Secretary he did nothing further. The matter was left in limbo and he did not implement. That is to his credit. All we want is a simple assurance now that if the same thing happens and the TUCC, representing the consumer, says that it is not in their interests, he will take the same line and the matter will die the death there and then.
I recognise that the Secretary of State has made great play with the traffic figures. I made a number of inquiries. In the constituency of the hon. Member for Argyll a number of people from Dunoon whom I had never met before took the trouble to 'phone me independently. I have been in contact with three councillors—none of them from the Labour Party—all of whom have expressed the deepest anxiety about the moves that are being made by the Government. Anyone who has read the account on Saturday 11 July in the Dunoon Observer and Argyllshire Standard of the meeting of the Dunoon community council, which was packed and at which people had to stand throughout the 2¼ hour proceedings, will see that it was said that:
This meeting deplores the announcement without consultation by the Secretary of State.
There is a great deal of evidence that there is local concern—and rightly so.
I do not like what is being proposed. It is unsafe in practice and in theory. I object strongly to such a rescue operation for a company which, at the end of the day, has been selling to Mexico boats 'which used to be on the Islay run and which has withdrawn the service from the Islay run. Only a few years ago, it was desperately trying to fell itself and trying to interest Caledonian MacBrayne in the possibility of buying it, lock stock and barrel. That is not a pedigree which inspires confidence. Such an important ferry route is not suitable for operation on the basis of private profit and should not be handed over to any private sector monopoly operator.
Caledonian MacBrayne is not above criticism. I accept that there are many reservations about its marketing and about the way in which it has provided the service.
However, at the end of the day it is publicly accountable, it guarantees continuity, has the right terminals and, overall, a wide tradition of service throughout the Highlands and Islands. It should not be betrayed, as proposed in the draft undertaking.

Mr. John MacKay: As the Secretary of State and the hon. Member for Glasgow, Garscadden (Mr. Dewar) have said, this debate about Gourock and Dunoon cannot be taken in isolation from the shipping service on the West Coast. As the hon. Member for Garscadden has said more than once, the unfortunate decision by Western Ferries to remove itself from the Islay route has been brought on it by the totally unfair competition from subsidised Caledonian MacBrayne.
I appreciate that the hon. Member for Garscadden is new to the brief. I hope, if I can give him some advice, that he will read the transport research paper No. 6 entitled "The Future of Ferry Services in the Highlands and Islands" by the Highlands and Islands Development board, a body of which, I am sure, he normally approves.

Mr. Bruce Millan: My hon. Friend has already read it.

Mr. MacKay: If the hon. Member has read it, I notice that he did not quote from it. I am not surprised at that because the general pattern that that report wishes to aim at is much more akin to that which Western Ferries has brought to the West Coast than to the pattern Caledonian MacBrayne has brought.
Although the hon. Member for Garscadden made some cheap gibes and jeers about Western Ferries withdrawing from the Islay route, that is not the reaction of many of my constituents in Islay. I have received a letter written on behalf of two organisations—the National Farmers of Scotland Union in Islay and Islay Farmers Ltd., which is a major user of the transport service. The secretary of both organisations, Mr. George Graham, writes:
The withdrawal of Western Ferries must not be allowed to happen…We at present benefit through the fact that Western Ferries are here. If they withdraw we suffer.
That is the genuine opinion of the farming and business community and the distilling industry in Islay. They are exremely fearful. Therefore, it will not do for the hon. Member for Garscadden to say that Western Ferries operates on an easily dispensable route. The right hon. Member for Western Isles (Mr. Stewart) and the hon. Member for Inverness (Mr. Johnston), who have constituency interests in West Coast shipping, will know that the advent of Western Ferries has had an interesting and useful result on the service run by Caledonian MacBrayne.

Mr. Buchan: Will the hon. Gentleman give way?

Mr. MacKay: I believe that the hon. Gentleman wishes to speak. If he interrupts me, obviously his chances of speaking will diminish.
The direct competition on both the Islay route and the Dunoon-Gourock route will cease from 1 October. That is unfortunate, but that is perhaps one of the inevitable results of the fact that on most of the West Coast there is not enough traffic for two competing operators.
That does not mean that we should not see how different operators can operate on different services. That is important. I do not believe that Caledonian MacBrayne at all times and in all places can provide the most imaginative and best service. It does a splendid job on many of the routes that it plies, and it should not be thought otherwise. Caledonian MacBrayne is an essential part of island life, especially on the small islands. As my right hon. Friend

said, he has increased the subsidies very considerably, not only in line with inflation, but ahead of it. That has been deeply appreciated by my constituents and others.
The hon. Member for Garscadden has done a lot of research and knows a lot about this subject, but perhaps I can make him aware of several other interesting points. Historically, the West Coast was run by David MacBrayne Ltd. In 1968, the Labour Government's Transport Act brought into being two companies—Caledonian MacBrayne and David MacBrayne Ltd. That is not just history, because the important division was that David MacBrayne Ltd. was to run those services that could not be made profitable and always had to be run with Government help. By contrast, Caledonian MacBrayne had to run services on routes that could be profitable and would not need a subsidy.
It is interesting that the two routes about which we are talking—Gourock-Dunoon and Islay—were both given to Caledonian MacBrayne because both were supposed to be self-supporting. Yet last year, on the Dunoon-Gourock route, Caledonian MacBrayne managed to lose £800,000 on a turnover of £1,304,000. That is a pretty good way to lose money. The company also lost £400,000 on the Islay route last year—and that, on its own admission, before interest depreciation and reserve fleet costs.
In 1968, shipping on the West Coast was two-way. It was still largely the old steamers, but Caledonian MacBrayne introduced the hoist system for motor cars. That was an interesting but not the best method. Pressures for change were on their way, and in 1968—everyone should be fair about this—Western Ferries introduced a proper roll-on/roll-off system on the Islay route. Such was its success that it captured most of the traffic on the Islay route and it made a modest profit.
The people in Cowal saw these huge advantages and campaigned to have Western Ferries come to the Clyde. In 1975, Western Ferries went to the Clyde with its simple roll-on/roll-off terminals at Hunter's Quay, near Dunoon, and McInroy's Point on the Gourock shore.
Briefly, the difference between the two systems which operate on the Clyde is that Western Ferries has a proper roll-on/roll-off system. One drives on one end and at the other side one drives off the other end.

Mr. George Robertson: Will the hon. Gentleman give way?

Mr. MacKay: I am tempted not to, but I will.

Mr. Robertson: I am sure that the House is grateful for the hon. Gentleman's graphic technical description of a roll-on/roll-off ferry, but can he give any evidence for his astonishing assertion that the people of Cowal campaigned to get Western Ferries to operate between McInroy's Point and Gourock?

Mr. MacKay: If the hon. Gentleman checks with recent press reports, he will see a quotation from ex-provost John Thomson to the effect that people there campaigned to get Western Ferries to operate on the Clyde. That is my memory, too, and ex-provost Thomson agrees.
As the Opposition clearly do not like what I am saying, I should point out that paragraph 3.3 on page 7 of the Highlands and Islands Development Board transport document to which I referred states that
some progress has been made towards concentration upon short, frequent routes which carry substantial traffic volumes and are operated with exemplary efficiency.…MacInroy's Point—Hunter's Quay ferries illustrate this approach".
The Highlands and Islands Development Board therefore agrees that it is operated with "exemplary efficiency".
I know that Opposition Members do not want me to go on for too long, nor do I wish to do so, but I want to make these points.
By 1976, on the Dunoon-Gourock route there was both a Western Ferries roll-on/roll-off service and a Caledonian MacBrayne service with a modified roll-on/roll-off system. That cannot be denied, because it is a side load at one end which requires manoeuvring on the boat and the use of turntables at certain times, although not to any great extent at the moment due to the limited amount of the traffic currently carried by Caledonian MacBrayne.
In 1968, there was to be no subsidy on Caledonian MacBrayne. Yet a subsidy was given. Indeed, one of the reasons why Western Ferries has had to come off Islay is that over the years since 1975 more than £2 million in operating cost subsidies alone has been given to Caledonian MacBrayne. Western Ferries said in 1975, as I am sure the right hon. Member for Glasgow, Craigton (Mr. Millan) remembers, that it could run the Islay service on that subsidy alone without charging any fares at all. Over the past few years, unfortunately, the pattern of Islay has been different from that on the Clyde. People have decided to use Caledonian MacBrayne, with the inevitable consequence that Caledonian MacBrayne will now he the sole operator.
On the Clyde, however, the pattern is different. There is no getting away from the simple fact that, for a variety of reasons, the motoring public in particular have voted with their wheels, if I may put it that way, to go by Western Ferries. In the last full year for which figures are available, 63 to 64 per cent. of the car traffic went by Western Ferries, leaving some 34 per cent. to go by Caledonian MacBrayne. This year the figures will be even more in favour of Western Ferries. To date, it looks like about 70 per cent. to Western Ferries and 30 per cent. to Caledonian MacBrayne. As my right hon. Friend said, while the balance is in favour of Caledonian MacBrayne, for reasons that I shall mention, even in passinger totals there is a one-third to two-thirds ratio, so a substantial minority of the passenger traffic actually goes by Caledonian MacBrayne. I must point out that both companies include as passengers the drivers and passengers of cars, which affects the figures a little, but it does not alter the total balance.
As I have said, the taxpayer spent more than £800,000 last year and an estimated figure of just under £500,000 this year. The hon. Member for Garscadden mentioned that one of the ways in which Caledonian MacBrayne has made the saving has been to reduce the sailing to one vessel only, which means that it is only once per hour.
The sailings have been halved, whereas Western Ferries has a much superior timetable, and always has had. It sails on the half-hour and on the hour. Caledonian MacBrayne now sails at, I think, 35 minutes past the hour, and it is the one and only sailing that it makes from Dunoon to the other side. Western Ferries also sails much later in the evening, up to 11.30 from Hunter's Quay to Gourock, and with a midnight ferry coming back at the weekends. During the week it has an hourly service in the evening at 7, 8, 9 and 10 pm. People can move back and forth across the firth in the evenings. That is a fact and cannot be gainsaid.
Caledonian MacBrayne's latest ferry departs from Dunoon at 20.35. Western Ferries provides a service far later in the evening, and especially at the weekends, up to 11.30 and midnight. That is important. It is used by a great many people. Indeed, I am sure that even the hon. Member for Hamilton (Mr. Robertson), when he visits his parents in Dunoon, may have recourse to Western Ferries if he wishes to get home late in the evening after his visit. Many people use the service in the evenings as well as during the day.
The Minister clarified one matter about the car ferry traffic. The balance is 70 per cent. to 30 per cent. The £300,000 is to enable Western Ferries to buy a 32-car boat in order to replace its 16-car boat. Perhaps the Minister will confirm that.
Western Ferries has been under a fair degree of attack about the service that it runs. It provides the emergency service across the firth. At 20-minutes call-out time it can be there to take an ambulance across the firth. Nobody else does it. Caledonian MacBrayne does not do it. Indeed, Western Ferries does it for nothing. Western Ferries, therefore, has won a significant proportion of the car traffic because of the level of service, because it is efficient, and because it has economic fares. It will, I believe, be economic to the taxpayer.
I should like to quote from a letter to the Secretary of State from the Dunoon and Cowal tourist organisation. It states:
There is no question that since Western Ferries commenced the operation of a car-ferry link between Hunter's Quay (Dunoon) and MacInroy's Point (Gourock) a number of years ago, they have provided locals and visitors alike with a quite exceptional service. The manner of their operation and that of their staff is above reproach. On the vehicle side there are no worries.
I share some of the reservations of the hon. Member for Garscadden. [Interruption.] I am sorry that Labour Members are unhappy, but I have the principal constituency interest in this matter, and I feel that I ought to be allowed to make my speech. There were some Labour Members who had a party conference at Dunoon, got stranded on the other side, and have not been back since for their conference. I do not see why they should feel that they have a right to cut my time short. [Interruption.] If they do not interrupt me, I shall get on more quickly.
There are two small points to be made. One relates to the side door entrance to Dunoon at Hunter's Quay. It would be very much better if Western Ferries could land its cars at Dunoon. Unfortunately, the terminal at Dunoon has not been properly designed for roll-on roll-off. If Western Ferries thinks that it could be done efficiently. reasonably cheaply and easily, will the Minister, along with Strathclyde, consider the alterations that would be needed to make Dunoon the terminal instead of Hunter's Quay.
The other problem is that of passengers and of the "Highland Seabird". The proposal is that the "Highland Seabird" should run a basic hourly service well into the evening between the two piers. I can vouch for the comfort of the "Highland Seabird". It is much more comfortable to travel in than the "Juno" or the "Jupiter". The seating arrangements are much better. Some people have cast doubts on her reliability, but in the winter of 1977–78 she was on contract in Loch Kishorn, taking people nine miles in the Sound of Raasay to the platform being built for the Ninian field. She enjoyed 97·1 per cent. reliability in the


Sound of Raasay out from Loch Kishorn. That cannot be said to be too bad. Her certification is of short international voyage class 2 type, which is superior to the Caledonian MacBrayne certification. Of course, if there is a heavy passenger demand for the route the vessel can go faster and do more crossings than a conventional boat, and that is important. I certainly hope that it will match the trade.
The main problem is the exposed nature of Dunoon pier, which is also a problem for Caledonian MacBrayne. The hon. Member for Garscadden did not mention that, but it is a major problem. Will my hon. Friend the Under-Secretary give me some indication of alterations that may be made at Dunoon pier to help the movement of passengers on to the "Highland Seabird"? That is the problem that worries me. On busy days like Cowal Games day there will be other boats on the firth such as the "Waverley" and the "Ivanhoe".
I am worried about the one-year limit on Government assistance. I am not in the least happy about the bussing option, other than in emergencies. I know that the Labour Party will not like this, but I cannot see why, if a private operator can run a service with a much lower subsidy than another concern, whether it be another private concern or a nationalised enterprise, he should not be given the route.
I want a guarantee that Caledonian MacBrayne will not be able to use cross-subsidisation to undercut Western Ferries in competition for the Coulport run. If there is fair and square competition for that service and Caledonian MacBrayne wins it, I shall accept that, albeit unhappily. My hon. Friend must take care to guarantee that there will be fair competition, that Caledonian MacBrayne will be unable to hide costs in its reserve fleet or in other West Coast runs and do down Western Ferries.
I hope that Western Ferries will realise that the public eye is on it, just as the public eye in Islay is on Caledonian MacBrayne to see whether, given a monopoly, Western Ferries on Dunoon-Gourock and Caledonian MacBrayne on Islay provide a reasonable, efficiently and economically run service from the point of view of the passengers who pay the fares and of the Government who have to pay the subsidy.
Labour Members should read the report from the Highlands and Islands Development Board. It outlines two points. One is about route licensing. If route licensing means anything, that is what my right hon. Friend is doing on the Clyde with Western Ferries. The second point concerns the nature that ferry operations on the West Coast should assume. There should be cheap and efficient frequent services, not an emphasis on the capacity of one particular service. In that way we can aim for the sort of service that we are always told the Norwegians provide much better than we do.

Several Hon. Members: rose—

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. There are only 34 minutes of the debate left, and we have had only three speeches.

Dr. J. Dickson Mabon: I take your point at once, Mr. Deputy Speaker. I have great admiration for the hon. Member for Argyll (Mr. MacKay) in his various manifestations, but he has tonight done himself a grave disservice by taking 20 minutes of a

90-minutes debate, even to defend what he regards as a vital constituency interest. We all have constituency interests. My hon. Friend the Member for Renfrewshire, West (Mr. Buchan) and my hon. Friends from the Highlands all want to make their points. It was unfair of the hon. Gentleman to have gone on for so long, particularly since the Minister has to reply to the cogent case advanced by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar). My hon. Friend destroyed any confidence any person—including the Secretary of State—could have had in believing that what the right hon. Gentleman is doing tonight is sensible.
First, the right hon. Gentleman has to look at the viability of Western Ferries. I very much question whether that company can survive. That is an opinion shared by many others. The company has been sustained over the years by certain individuals hoping that they can beat Caledonian MacBrayne at its own game. When we were setting up the Scottish Transport Group in 1968 we were asking eight or nine profitable bus companies to subsidise Highland steamers and services. That is what it basically came down to in banding together the buses and the boats. There were so many objections by the national busmen to that that for a time I thought that perhaps we were making a mistake.
I doubt whether economic services can be run to the islands and even whether, for example, a good service to Gourock and Dunoon can possibly make a profit. I follow the logic of the hon. Member for Argyll. If we take away Caledonian MacBrayne, why cannot Western Ferries make a healthy profit on its own so that it would make a reasonable return on its capital, which it is not now getting?
The Secretary of State is cheating. He is allowing this company a monopoly right—an extraordinary decision for any Minister to take. He is also—and it smacks of a quid quo pro—giving a monopoly right to Caledonian MacBrayne, which contradicts the whole concept of the 1960 Act, which we tried to operate faithfully and truly when we came into office in 1964. If Western Ferries did not do well in Islay, that is hardly the fault of either the Labour Government or the Conservative Government.
I remember the late Gilmour Leburn in 1963 telling us of the concept of the roll-on/roll-off ferries, saying that he thought there had basically to be free competition, that one company would ultimately survive the other, and that the then Government would not take sides.

Mr. Russell Johnston: Does not the whole Highland and Islands Development Board concept of route licensing presume a monopoly on a particular route?

Dr. Mahon: Yes, of course it does. But it also presumes a fairness by the operator to the consumer. That is my second worry. If Western Ferries gets this privileged position in Gourock-Dunoon, the rates will go bad. There is no reason why they should not. The attractiveness of Western Ferries in the McInroy's Point and Hunter's Quay journey, although it is a shorter distance—but that is not the attractiveness apparently—is that it is cheaper. It is nonsense to have a kind of postscript to a speech about all the many people in Cowal, and in Gourock, for that matter, who rely on that ferry for their livelihoods. Sixty or 70 workers are involved, but I do not mean them alone. They were not consulted.
It is a terrible charge against the Secretary of State that he has not consulted the unions or the local authorities, or


the many, many people who are directly involved. He is getting a serious reaction in the different communities. If one does something to the Gourock-Dunoon run in relation to Caledonian MacBrayne, there are repercussions for Rothesay and Wemyss Bay and perhaps for elsewhere in the Highlands. Who knows?

Mr. John Maxton: My right hon. Friend is quite right. Some of the boats are sometimes used from Gourock to Arran in bad weather in circumstances where they are making the long run from Brodick to Gourock.

Dr. Mahon: I agree. I would hate to think that in crossing from Gourock to Dunoon I had to rely on one boat, and in the winter, too. What would happen if that boat was in serious trouble and had to be in dock for some time? Is there another one to replace it? If so, where is it? What would be the situation if something happened to the boat on the Rothesay-Wemyss Bay run? How is that boat to be backed up? The same applies to the Brodick-Ardrossan run. This is all of a unity. It is not all of a disunity. To talk about there being this one line is a grave error.
I hope that the Secretary of State will get all the advice he can from the TUCC and that he will listen to it. It is fundamentally wrong for the Government to give a grant to this company to improve the pier and adjust its services—a pier which, incidentally, is still owned by its competitor and which is a charge on the taxpayer, and whose docking dues that company should pay. Those dues should be economic. But, no. The right hon. Gentleman will give the company £20,000 to change the pier in order to accommodate passengers. The passengers will not get off the train at Gourock, take a bus to McInroy's Point, get on a 12-minute ferry, get off at Hunter's Quay and take a bus to Duroon. That is nonsense. That is the first gift to Western Ferries.
There should be a declaration of interest. What is Western Ferries? Who are the directors? What sums do they pay to the Tory Party? Does something smack of political chicanery? Perhaps there is more to come. Perhaps this proposal is but bread upon the waters. It is not only money for the pier that is involved. We shall then help the company to buy a ship. After that we shall give a revenue grant. Paragraph 7 of the draft undertaking is curious. It states:
In the event of the company obtaining a contract
Where is the contract? Even the type of contract is specified. There are many contacts that might be obtained. The Minister implies that if the Ministry of Defence pays, he will take back the money that he guarantees in the draft undertaking.
This is one of the most disgraceful proposals ever to be debated in the House. I hope that it goes the way of the others that have been exposed to public ridicule. It is nonsense. My constituents and those of my neighbour, my hon. Friend the Member for Renfrewshire, will lose their jobs. It is not only the workers who will suffer, but those who have to travel to work, to school and to the hospitals. Indeed, Inverclyde Royal hospital is the hospital for the area. It is important to take such things into account. When the Minister, with his sharpened wits, tries to reply to the debate, I hope that he will not bind himself to the concept of the undertaking, whatever the TUCC says will stand. I wish the proposal ill.

Mr. Norman Buchan: I shall be brief as that will perhaps enable another hon. Member to speak. This proposal is an exercise in hypocrisy by the Conservative Party. The Government were quick to run to the Monopolies and Mergers Commission about the gas industry. It would be interesting if Western Ferries, which has been given a monopoly from Dunoon to Gourock, were taken to the Monopolies and Mergers Commission. The firm entered into competitive pricing against a public organisation that has run itself into trouble at Islay. It is no wonder that the double-headed secretary of the National Farmers Union of Scotland wished the situation to continue at Islay. The competitive pricing undertaken by the two companies was advantageous to it. However, two different companies on two different routes were being ruined. This is a nonsense.
We should be discussing the best public service. Despite all that has been said about Caledonian MacBrayne in the past, the people of both communities are saying that they prefer a monopoly that has public responsibility and accountability to a monopoly that does not. If the Minister does not take my word for that, he can take the word of the Glasgow Herald. It states:
Though opinion in Cowal, like that in Islay, thinks Western Ferries have done a good job, few relish accepting its monopoly control of their main external link".
At the very time that a handout is being given to run a monopoly, the company is withdrawing from a route that it used to establish its bona fides for the rout on the Clyde.
The removal of the service from Dunoon to Gourock by Caledonian MacBrayne will have immense repercussions. My hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) knows these waters well, He has described the effect on the Arran line, the Brodick. to Ardrossan route. Ardrossan is put rapidly out of action in bad weather. In that event, boats have to be re-routed to Gourock in my constituency. The length of the journey involves pulling off one of the two boats on the Dunoon-Gourock line to back up the Arran route. That will not happen if there is a monopoly with one boat.
There is hardly a single passenger crossing by the ferry who has not come by car. If that is granted by the hon. Member for Argyll (Mr. MacKay), it knocks a hell of a hole in his case. It is nonsense, as the hon. Gentleman knows. No one walks the length of the esplanade from Gourock station to McInroy's Point.
The cost of £300,000 to the Government and the community is met at the cost of 60 jobs. The average cost of making a man unemployed is £5,000. The cost of providing a subsidy to a private firm—and what a private firm—is £300,000. We would have liked the names My right hon. Friend the Member for Greenock and Port Glasgow (Dr. Mabon) and I know some of the names. They do not give us much comfort in looking to the future.
This is a captive position tied up with the contract under paragraph 3(7) of the undertaking in relation to Coulport. What is that all about? Is it a means of saying that a deal has already been done over the lucrative Coulport contract, that the Ministry of Defence will pay and that, in the meantime, public sector transport is clobbered? That is what is happening. It should stop. It is criminal. In some ways, paragraph 3(7) seems almost technically criminal, let alone metaphorically criminal.
I hope that the Government, even at this late stage, will relent and will drop their vicious antagonism to public


sector operations. This is a piece of vicious politicking that has to be stopped. A hole has been blown in the thin-hulled vessel of the Government's policy. The proposal should be dropped now.

Mr. George Robertson: I shall try to emulate the example of my hon. Friends who have made brief contributions. I was brought up in Dunoon. My parents still live there. I have been a frequent user of both the Caledonian MacBrayne service and the Western Ferries service. I occupy, perhaps, a unique position in that I have been a passenger on a number of occasions on both services.
I can say from my local knowledge of the Dunoon area that feelings are running high on the issue. Even the hon. Member for Argyll (Mr. MacKay) who traipsed us around the technicalities or roll-on/roll-off ferries and the history of the division of the David MacBrayne company entered a number of caveats and reservations for his right hon. Friend the Secretary of State in the hope that the votes running away from him in the Dunoon and Cowal area might return in the expectation that the Secretary of State will build some of these reservations into his ultimate decision.
The greatest grievance felt by the people of Dunoon and Cowal is not necessarily confined to the undertaking and the circumstances surrounding it. It is the hasty manner in which the Government have chosen to ram the undertaking through the House before local organisations have had time to consider the implications for the community and give their views. I know that the Dunoon Commercial and Businessmen's Association has written to the hon. Member for Argyll expressing its concern and that it has received a prompt reply.
I believe also that the Dunoon and Cowal Tourist Association has written to the Secretary of State expressing its concern about the impact of the decision on tourism in the area. A graphic description in the Dunoon Observer and Argyllshire Standard shows the feelings aroused at a meeting of the Dunoon Community Council on the issue.
Various aspects have been mentioned by other hon. Members, but one of the crucial issue is that of passengers to and from Dunoon. As one who lived on the other side of the Firth of Clyde, I know how remote it can be. It is not an island, although the Secretary of State suggested that the Government's action was part of a policy for the islands of Scotland, but there is a remoteness that comes from being on the other side of a large stretch of water. Many people have used the ferry services across the Clyde daily in order to work in places as far away as Glasgow. No doubt a few—and fewer still in future—vote for the hon. Member for Argyll.
The magical figures produced to back up the Government's decision contain some interesting information. We were told by the Secretary of State that Western Ferries is making inroads in the crucial passenger traffic to and from Dunoon. We were told that it was taking 34 per cent. of the passenger traffic on the route.
On figures given to me by Caledonian MacBrayne, which carries an average of 15,000 passengers a week, I estimate that if Western Ferries is taking 34 per cent. of the total figure it must be carrying about 5,000 passengers

a week. But it carries about 4,000 cars a week, and as every car must have at least one passenger, we are talking of total potential independent passenger traffic of only 1,000 a week. Given that the vast majority must be travelling by car and that the passenger accommodation on those ferries is so limited, it seems unlikely that they are carrying a significant number of passengers, even at present.
I said that I would be brief, so I will not go into the problems that the "Highland Seabird" service could cause. Even the hon. Member for Argyll admitted that serious problems were involved. I understand that when the ferry used Dunoon pier in the past, in the summer months, it managed to have two major accidents by crashing into the flotsam. That was in the placid calm summer months. What it would be like in the winter months can only be left to the imagination.
Perhaps this is the co-ordinated transport policy lead that the Government led us to expect in the general election campaign that they would put forward—choice eliminated, competition eliminated and monopoly private operators introduced on the route.
The hon. Member for Argyll said during one of the general elections in which he stood for Argyll:
fares and freight charges must not be allowed to kill Argyll's economy.
In another part of the same leaflet he said:
The ineffectiveness of Tory opposition in Parliament shows how Liberal influence would be no less vital under a Tory Government than under Labour.
There is a rich vein of humour there and no doubt I shall regale the House with it in future months, but there is an even richer vein in the leaflet with which the hon. Member managed to win his first election. As a Conservative candidate in 1979 he put forward another bright idea:
A Scottish Development Fund, financed from oil revenue will be set up to pay for projects … Reception of all Television Channels throughout Argyll"—
and, wait for it—
subsidised commercial transport to the islands are two of the projects I will urge on this Fund.
On the one hand we are told that there can be no call on public funds for essential routes and traffic in this part of Argyll, but the hon. Member for Argyll got himself elected to Parliament by promising that there would be widespread subsidies from oil revenues given to practically every other transport route.
The hon. Member tried two different parties and a lot of elections to get himself elected to Parliament. His right hon. and hon. Friends on the Government Front Bench seem to be doing their best to make sure that he goes back to Oban high school at the first opportunity after the next election.

Mr. Russell Johnston: I shall be brief, as there is little time left, largely due to the speech of the hon. Member for Argyll (Mr. MacKay). I am a great admirer of many things about MacBrayne's, but I find it difficult to accept the view that has been extremely trenchantly expressed from the Labour Benches that there should never be a private operator on any of the ferry services.

Dr. Mabon: Never on a public subsidised service.

Mr. Johnston: All right, never on a public subsidy.

Mr. Buchan: How can one subsidise the public?

Mr. Johnston: I have only just started [Interruption.] I shall start again. I am not sufficiently knowledgeable to say whether the criticisms about the company, its financial viability and its profitability are well based. If they are well-founded, that is a serious matter. It would be foolish for the Government to make financial commitments to the extent proposed to a company that is not safe. I hope that clear answers will be given.
Everyone appears to be able to say precisely how much loss is made on the Gourock-Dunoon route, but no one will ever tell me how much profit or loss is made on the route between Kyle of Lochalsh and Skye, which is a publicly owned enterprise, on the ground that it is confidential commercial information.

Mr. Rifkind: That is correct.

Mr. Johnston: If it is confidential commercial information, why is no competitor operating? Why is not information about the route from Gourock to Dunoon commercially confidential? I fail to understand that.
I want to stress three issues that have been raised. The first concerns service withdrawal. What happens if a service once undertaken is withdrawn? What safeguards do the Government have? Other hon. Members have emphasised the back-up problem. It is extremely important. In my constituency experience, this summer the boat from Mallaig to Skye was taken off three times to go elsewhere. There is no back-up. That is a serious problem.
If the suspicions that have been voiced by the Opposition—I hope that they have been exaggerated—of the financial uncertainty of the company are fulfilled, what happens if it goes bankrupt? What will the Government do? What safeguards have they made in such circumstances?

The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): The hon. Member for Inverness (Mr. Johnston) has made a constructive contribution. I hope that I shall be able to reassure him
This is not simply an exercise in saving public expenditure. The purpose is to redirect a public subsidy from one aspect of ferry support, where in the Government's view it is not needed, to other areas where it would provide viable extra facilities to help to deal with the problems of the island communities. On the Gourock-Dunoon route Caledonian MacBrayne last year received a subsidy of £800,000 and this year a subsidy of £540,000 to provide a service in competition with Western Ferries, which, without any subsidy, has been taking an increasing share of the market over the past few years. That is nonsense at any time but especially when resources are scarce. With the money that will be saved by not having to subsidise an uncompetitive CalMac enterprise on this route, the Government hope to ensure that the funds saved will provide extra help for the island communities elsewhere in Scotland.

Mr. Maxton: Will the hon. Gentleman give way?

Mr. Rifkind: No, I shall not.
What I said a moment or two ago is not an empty statement. The hon. Member for Renfrewshire, West (Mr. Buchan) cannot deny that in the last couple of years, at a time when public expenditure generally has been reduced, the Government have doubled in real terms their help to

the island communities. We have made it clear that we wish to give further help to the island communities. However, we do not conceal that that is difficult. We have to examine the best way of doing it.
We give a substantial subsidy—at least £500,000—through a company which, even with the subsidy, is losing traffic to an unsubsidised operator. That is a sensible area in which to find savings that can be used elsewhere. It would be grossly irresponsible if we did not.
The hon. Members for Glasgow, Garscadden (Mr. Dewar) and Renfrewshire, West, and my hon. Friend the Member for Argyll (Mr. MacKay) made reference to the Coulport contract referred to in the undertaking. The hon. Member for Garscadden and the right hon. Member for Greenock and Port Glasgow (Dr. Mabon) suggested that there was something sinister about that reference.
I make it clear that the Scottish Office has no locus in the awarding of that contract. We shall make no indications to anyone as to how we wish the contract to be determined. It will be determined in exactly the same way and with exactly the same strict standards that are applied to any contract for which lenders are made by outside bodies.
I repeat that the Scottish Office has no locus in the awarding of the contract. We shall make no representations to the Ministry of Defence about the awarding of the contract. The Ministry of Defence, no doubt, will apply exactly the same criteria that it has applied in the past. That is a matter for that Department. We shall not interfere, nor shall we make any representations in respect of the contract. We have made that clear.
We must consider that there is a possibility that that contract could be awarded to Western Ferries and, if it were, Western Ferries would wish to use the "Highland Seabird". It is in the public interest that we should make it clear that if it is successful in winning a contract, for which it would use the "Highland Seabird", even the temporary subsidy proposed would either not be necessary at all or would be necessary only to a limited extent. Therefore, it would be the height of irresponsibility not to make any reference to that. We should have been criticised, rightly, if we had failed to make such a reference.
The Government have been asked about their reaction to the Scottish Transport Users Consultative Committee recommendations. The STUCC is an advisory committee. The hon. Member for Garscadden said that when the Islay route was in question the Government of the day accepted the advice of the STUCC. We must examine its conclusions closely. We have no way of anticipating its conclusions. I cannot give any undertaking. What happens will depend on its conclusions, its recommendations and its reasons. Only when those facts are known will it be possible for anyone to come to a considered judgment.

Mr. Robert Maclennan: Why on earth is the undertaking brought before the House before the STUCC has given its opinion? Why are we denied the opportunity of considering the arguments by the STUCC? There is no urgency. The Minister has behaved disgracefully.

Mr. Rifkind: I thank the hon. Gentleman for his usual helpful intervention. We have made it clear that the views of the STUCC will be taken into account. If it is decided to implement the undertaking, and it is appropriate to start


that at the beginning of October, it is likely that any inquiry will have been held, we shall know the STUCC's recommendations and therefore it will be possible to come to a judgment.
The hon. Member for Garscadden suggested that it was inappropriate that the Government should create a monopoly on the Gourock-Dunoon route. He is right that Western Ferries, if it is the sole operator, becomes a monopoly in exactly the same way as CalMac is a monopoly on almost every other route in Scotland. It is by no means the preferred solution. It is clearly preferable to have competition. However, it is ridiculous to suggest that a subsidy should be provided to a competitor in order that there should be competition that would otherwise not be there. We should be delighted to see genuine competition on equal terms not only continuing on the Gourock-Dunoon route but introduced elsewhere. However, we have not withdrawn the subsidy from CalMac on Islay because we recognise that it has the bulk of the traffic and has won the support of the island community, albeit only with a subsidy.
However, on the Gourock-Dunoon route, even with a major subsidy, there has, nevertheless, been a constant loss of passenger and vehicular traffic to Western Ferries, although it has no subsidy and is, therefore, in an unfair competitive position with CalMac. From 1976 to 1980, the number of CalMac's passengers reduced from 1 million to 713,000 and its cars from 159,000 to 99,000. In the same period, Western Ferries had significant increases in both.
The hon. Member for Garscadden started by saying that the main consideration should be who can provide the best service to the public, but in the case of Gourock-Dunoon the public have already shown their preference. They prefer to give their support to Western Ferries, although no subsidy is available, instead of continuing to give it to Caledonian MacBayne. I have no doubt local opinion would prefer two services. It would be extraordinary if it did not. That is natural. It is as true in Islay as it is in Gourock-Dunoon.
However, the Government must consider whether the best use of the money is to subsidise the uncompetitive service of Caledonian MacBayne or to use it in other parts of Scotland where it could more directly benefit areas that do not have two routes and may even have no route at all.

It being one and a half hours after the commencement of proceedings on the motion, Mr. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted business):—

The House divided: Ayes 116, Noes 48.

Division No. 285]
[12.08 am


AYES


Alexander, Richard
Bright, Graham


Ancram, Michael
Brinton, Tim


Atkins, Robert(Preston N)
Brooke, Hon Peter


Beaumont-Dark, Anthony
Brown, Michael(Brigg &amp; Sc'n)


Beith, A. J.
Bruce-Gardyne, John


Berry, Hon Anthony
Cadbury, Jocelyn


Bevan, David Gilroy
Carlisle, John (Luton West)


Biggs-Davison, John
Clark, Hon A. (Plym'th, S'n)


Blackburn, John
Clarke, Kenneth (Rushcliffe)


Bonsor, Sir Nicholas
Colvin, Michael


Boscawen, Hon Robert
Cope, John


Bottomley, Peter (W'wich W)
Cranborne, Viscount


Bowden, Andrew
Dunn, Robert (Dartford)


Braine, Sir Bernard
Elliott, Sir William





Faith, Mrs Sheila
Page, Richard (SW Herts)


Fenner, Mrs Peggy
Penhaligon, David


Fletcher, A. (Ed'nb'gh N)
Pollock, Alexander


Fletcher-Cooke, Sir Charles
Prior, Rt Hon James


Garel-Jones, Tristan
Proctor, K. Harvey


Goodlad, Alastair
Rathbone, Tim


Gower, Sir Raymond
Renton, Tim


Gray, Hamish
Rifkind, Malcolm


Griffiths, Peter Portsm'th N)
Roberts, M. (Cardiff NW)


Hamilton, Hon A.
Rost, Peter


Hawkins, Paul
Shaw, Giles (Pudsey)


Hawksley, Warren
Shepherd, Colin (Hereford)


Heddle, John
Skeet, T. H. H.


Hogg, Hon Douglas (Gr'th'm)
Smith, Cyril (Rochdale)


Hunt, John (Ravensbourne)
Speed, Keith


Johnston, Russell (Inverness)
Speller, Tony


Jopling, Rt Hon Michael
Spicer, Michael (S Worcs)


Kershaw, Sir Anthony
Sproat, Iain


Kitson, Sir Timothy
Stainton, Keith


Le Marchant, Spencer
Stanbrook, Ivor


Lester, Jim (Beeston)
Steen, Anthony


Lloyd, Peter (Fareham)
Stevens, Martin


Lyell, Nicholas
Stewart, Rt Hon D. (W Isles)


MacGregor, John
Stewart, A.(E Renfrewshire)


MacKay, John (Argyll)
Stradling Thomas, J.


McQuarrie, Albert
Taylor, Teddy (S'end E)


Major, John
Temple-Morris, Peter


Marlow, Tony
Thompson, Donald


Marshall, Michael (Arundel)
Thorne, Neil (Ilford South)


Mather, Carol
Trippier, David


Maude, Rt Hon Sir Angus
Waddington, David


Maxwell-Hyslop, Robin
Wakeham, John


Mellor, David
Walker, B. (Perth )


Meyer, Sir Anthony
Watson, John


Miller, Hal (B'grove)
Wells, Bowen


Mills, Iain (Meriden)
Wheeler, John


Moate, Roger
Wickenden, Keith


Murphy, Christopher
Williams, D.(Montgomery)


Myles, David
Wilson, Gordon (Dundee E)


Needham, Richard
Wolfson, Mark


Neubert, Michael
Young, Sir George (Acton)


Newton, Tony
Younger, Rt Hon George


Normanton, Tom



Onslow, Cranley
Tellers for the Ayes:


Osborn, John
Mr. Selwyn Gummer and


Page, Rt Hon Sir G. (Crosby)
Lord James Douglas-Hamilton.




NOES


Bennett, Andrew(St'kp't N)
Lambie, David


Brown, Hugh D. (Provan)
Mabon, Rt Hon Dr J. Dickson


Buchan, Norman
McCartney, Hugh


Campbell-Savours, Dale
McElhone, Frank


Canavan, Dennis
Maclennan, Robert


Cocks, Rt Hon M. (B'stol S)
McTaggart, Robert


Cook, Robin F.
Marshall, D(G'gow S'ton)


Cowans, Harry
Marshall, Jim (Leicester S)


Cryer, Bob
Maxton, John


Dalyell, Tam
Millan, Rt Hon Bruce


Dewar, Donald
Morton, George


Dixon, Donald
O'Neill, Martin


Dormand, Jack
Powell, Raymond (Ogmore)


Duffy, A. E. P.
Prescott, John


Eadie, Alex
Robertson, George


Evans, John (Newton)
Ross, Ernest (Dundee West)


Ewing, Harry
Skinner, Dennis


Forrester, John
Smith, Rt Hon J. (N Lanark)


Hamilton, W. W. (C'tral Fife)
Snape, Peter


Harrison, Rt Hon Walter
Soley, Clive


Hattersley, Rt Hon Roy
Strang, Gavin


Hogg, N. (E Dunb't'nshire)
Welsh, Michael


Home Robertson, John



Homewood, William
Tellers for the Noes:


Hoyle, Douglas
Mr. Allen McKay and


Hughes, Robert (Aberdeen N)
Mr. Frank Haynes

Question accordingly agreed to.

Resolved,
That the draft Undertaking between the Secretary of State for Scotland and Western Ferries (Argyll) Limited, which was laid before this House on 10 July, be approved.

Orders of the Day — Design Skills

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Berry.]

Mr. Marcus Fox: We often hear it said in the Chamber that our industrial base is something that we fondly remember and that we can never regain. There are those who can remember when Britain was the workshop of the world and when we exported to every major country, if not every country. We saw that base eroded. The classic example is the motor car industry. I think that I am right in saying that Austin cars were built in Japan under licence. Having gained that know-how, the Japanese excluded everyone else from the market. That market is now worth about 5 million vehicles. From that base the Japanese have managed virtually to take over the world scene. It is a familiar pattern and we should remember that it is one that we helped to create.
I represent a textile and engineering constituency. It sold machinery that made goods that competed eventually with our own exports. In many areas we have lost. A number of reasons led to us losing, which many hon. Members remember and could recount. I do not want to present a full list. We could talk about the unions, restrictive practices, wage claims that were too high, weak management and a failure to match up to changes. I think that we all agree that we have to sell more at home and abroad. That is why I have taken the subject of the encouragement of design skills for the debate. I have done that deliberately. All I am asking for is the sympathy and co-operation of the Department. I am delighted to see my hon. Friend the Minister on the Front Bench. I have been known to make an Adjournment debate speech with no Minister on the Front Bench. That was rectified within 10 or 15 minutes.
If I have a criticism of British industry—I must be careful because I have a constituency which is industrial in every sense of the word—it is that our industry has failed to adapt itself as quickly as it should to the changing needs that I have mentioned. Other countries have done that far more quickly than we have. In other words, market forces have not been responded to. We have continued to manufacture goods that we wanted to manufacture and we have not anticipated what the consumer or customer had in mind. The import penetration into the United Kingdom is not just on price grounds. There are many other factors involved. Often, as far as the customer is concerned, those goods have more appeal. They are designed and packaged more attractively.
British industry at all levels is not as aware as it should be of the importance of design. Those skills often—of course, there are exceptions—are not given their rightful recognition. On the boards of many companies that I can think of, it is hard to find mote than one or two where there is a board member who has experience in design and sales appeal. Of course, there are accountants—perhaps too many—on the boards of British companies, and, of course, there are legal people. I suggest that that, in itself, is a mistake.
My point in this debate is that, because of that lack of knowledge, or because the order of priorities has been wrong, we are witnessing what I intend to call a design drain. I am not asking for more money from the Department of Education and Science. Funding in the


schools and colleges must continue. I am admitting that the training is right. I would go so far as to say that we are acknowledged to have the best design schools in the world. The proof of that is easily obtained by the number of foreign students who are still seeking to come here, many of them paid for by their Governments.
My concern is what happens to those students after their training. For some time I have been concerned about that. My worst fears have been confirmed in that an increasing number are going abroad once they have completed their training, which can take several years. All that talent, which is our seed corn of the future, is lost to us once those people take up jobs in countries such as America, Japan or France. Many of them do not go there because they want to, but the truth is that they cannot find the right job in the United Kingdom.
When one talks about design, people often instinctively think of textiles or fashion. This is an industry that I know something about, and it is a fact that after five years of qualifying, more than 60 per cent. of people trained in textile design are either working overseas or for foreign companies. I accept that that is a difficult industry, that fashions change rapidly and that cheap labour is used. We know that from debates on the multi-fibre arrangement, and so on.
There are two types of company in this area. One is design oriented and will produce the goods that it thinks people want, and the other is price oriented. It makes what the manufacturer needs. If jobs are not available in manufacturing for the people with the skills that I have described, there should be opportunity elsewhere, as near to the general public as possible. I am talking about the retail side. People with such qualifications should consider becoming buyers in our major department stores. In that way they could educate the public to the sort of designs that they want to produce.
I see little evidence of the people I have described going into that sector. However, I want to talk about design as a whole. People will say that the recession is the main reason for this problem. It is a factor, but it is not the main one. The truth is that four years ago this trend was obvious. I am talking not about thousands of jobs, but about a few hundred each year. Those jobs could so easily be placed in our own industry. It is not sufficient for one or two large companies to be interested and involved.
The whole of British industry and commerce should be alerted to this situation. Why should not smaller businesses be informed of the value of obtaining the sort of talent I have described, so that they can enter new markets with new products that have an appeal that has never before been understood? Our competitors understand the importance of design. That is why they are attracting many of our graduates overseas. Once abroad, they help to produce appealing goods aimed at the Western European market. They should be here, using the skills learnt here—subsidised by the Bitish taxpayer under our education system—to create more jobs within the United Kingdom.
Design is not just to do with textiles and fashion, although that is an important area. It stretches across the whole of industry, from cars to bulldozers, from domestic products of all kinds to packaging. It is not restricted to food. We neglect that fact at our peril.
I am asking the Minister for some proof that there will be a closer relationship between college and industry. We all know that teachers are a valuable commodity in any nation. I do not wish to be derogatory when I say that design schools are there to train designers and award degrees. They do not have the expertise to sell the graduate products to an investment industry that often holds a completely different concept of design. These schools cannot educate and enlighten the vision of industry.
I accept that many schools in Britain approach industry and encourage a liaison in respect of employment. But I am not satisfied that the effect so far achieved is sufficient. I ask the Minister to give a lead. He should consider the possibility of setting up a think tank. There may be one already, but perhaps it is not functioning on all cylinders. We must find ways and means of solving the problem. We must produce ideas to fill this vacuum so that we can place people with the skills that I have described. I know that the Royal College of Art will play its part.
We have a Minister responsible for smaller businesses. I am sure that if my remarks are drawn to his attention, he will respond, because like me, he was in the Whip's Office, so he must be a nice chap. I sincerely hope that my comments will be brought to his attention.
The Budget contained many concessions which Conservative Members welcomed, such as financial inducements for people to start up in business. Is not this an area to which more attention should be paid? I know that in desperation, many young designers started their own businesses, with without the backing of people with other expertise. Many did not survive for long. It is a shame that they were not put in touch with existing businesses, even those on a small scale, so that they could have had a far greater chance of success.
According to The Sunday Times of 19 July, the Government are already moving in this direction in a different way, in that there is to be a merger between the NEB and the National Research and Development Corporation. I hope that that is not a leak, but I am told that it is to be called the British Technology Group. The Sunday Times went on to say that the group
will give much needed new blood to British inventiveness and new products. It will be run much more like a private company, concerning itself with profit. …The Cabinet is very concerned about the need for industrial research to be linked to practical projects which will be money-spinners.
I welcome that kind of approach, and I want that policy to be extended to the areas that I have described. It is no good having new products without this dimension, which I think would come under the heading of "sales appeal". It is equally as important as quality. Whether we like it or not, we live in an advertising-oriented world. For that reason, if for no other, the importance of the matters that I have raised should be understood.
The House is often accused of discussing immediate problems and allowing them to overtake everything else. When one thinks of the past few weeks, that is perfectly understandable. But it is no excuse for not looking to the future. I have an unshakeable belief in the future of the United Kingdom and indeed in British industry. I believe that it can face up to the challenges of the future and the competition that will be there. We have the people with the ingenuity, the skills and the enterprise to do that. For the sake of jobs—and they matter to all of us—we certainly do not want to make the mistakes that we made in the past.

The Under-Secretary of State for Industry (Mr. Michael Marshall): It is a particular pleasure to reply to my hon. Friend the Member for Shipley (Mr. Fox). As ever, he brings to our deliberations his Yorkshire good sense on a day when perhaps all of us are aware of the particular enjoyment that we get out of good news from Yorkshire, in this particular instance from Headingley. It is also a tribute to my hon. Friend that he has attracted the support of my hon. Friends the Members for Dudley, West (Mr. Blackburn) and Luton, West (Mr. Carlisle), who have been present to hear his remarks.
I particularly thank my hon. Friend for providing this opportunity to discuss a matter that we see as one of the key elements in the Government's drive to encourage this country's industrial revival. Clearly, without a thriving industrial base we have little hope of achieving the level of economic recovery that is essential to our future wellbeing. It is clear that much more effective use must be made of design and designers to help re-establish that industrial base.
In responding to my hon. Friend, I should say at the outset that he raised a number of issues of great significance. In his submission tonight, there is a good deal upon which one would wish to ponder. I shall, however, take the opportunity to pick up some of the points that he made.
My hon. Friend singled out, for example, the work of the Royal College of Art. I am happy to tell him that the gist as a result of the discussions that he has had has been brought to my Department's attention and I shall myself be visiting the Royal College of Art to follow up some of the matters that he has initiated. I am grateful to him for that.
I wish to touch upon some of the criticisms that my hon. Friend mentioned. I think that we are all aware of some of the drawbacks, the failures and the gaps which have to be filled. Before doing so, however, perhaps I may pick up my hon. Friend's remark about the integration of the National Enterprise Board and the NRDC. As my right hon. Friend the Secretary of State said yesterday in reply to a question from my hon. Friend the Member for Surrey, North-West (Mr. Grylls), bringing the two organisations together should enable them to carry out their existing functions more effectively and economically, and it was typical that my hon. Friend should see this as part of the mainstream in discussing this important question.
It is important that design should be properly understood. It is not just a matter of the aesthetic qualities of the finished product, nor is it just a matter of the technological and functional aspects of the product, although clearly both form essential parts of the whole. Design is involved in the whole cycle from the moment a product is conceived to its successful establishment in the market place.
The cycle begins with the original concept and includes the prototype, testing and development stages, identification of the market, modification to meet market requirements, setting up the production line and finally getting the product on to the market at the right price. It involves designing to standards, whether set by this country or by overseas countries—a point to which I shall return later. It also involves designing for efficiency and economy of production and designing for the best use of modern techniques and materials.
This is, without question, the job of industry. But it is also the Government's task, and one that we accept, to create the best possible climate for this to happen, and that is what my hon. Friend was urging on us tonight. There is no part of the process that I have just defined in which the Government are not already actively involved in providing assistance either themselves or through bodies that they fund or otherwise support. I should like to touch on a few of the key areas.
The manufacturing advisory service, which is operated for the Department of Industry by the Production Engineering Research Association, provides a service to small and medium sized businesses to help them with their manufacturing problems. The service provides advice on manufacturing techniques and equipment appropriate to a project. It includes value analysis, quality assurance, computer-aided design and computer-aided manufacture, the use of mini-computers and microprocessors, production and stock control and many other manufacturing activities.
The microelectronics applications project was introduced in 1978 in response to widespread concern that British companies were slower than their overseas competitors to see the scope for improving performance offered by microelectronics. Substantial improvements are possible in every sector of manufacturing industry, whether by enhancing existing products, maintaining a more effective control over the manufacturing process or by streamlining and improving administrative control. MAP's objectives are, therefore, to raise significantly the national awareness of the potential of microelectronics; to increase substantially the supply of people trained in microelectronic skills; to help firms to establish the relevance of microelectronics to their business; and to improve the rate of application of microelectronics in firms' products and processes, particularly by first-time users.
Another key area is the work of the Computer-Aided Design Centre. This promotes the use of CAD techniques to achieve the maximum improvement in productivity and profitability in the engineering industries. A system of computers is available for use in collaboration with industry for project work and application development as well as for productive use. Data links to other systems in various parts of the country provide a wide range of applications facilities. A close working relationship with industrial, university and research users creates an effective means of bringing research results quickly into industrial use. The centre often forms joint projects with industrial partners which not only reduces costs to individual firms but allows the centre to market systems on an industry-wide basis. A consultancy service is available to industrial companies embarking on the use of computers in engineering design and manufacture.
All this meets in a wider sense much of what my hon. Friend was discussing, and particularly when he spoke about small businesses, because it is aimed at keeping the manufacturer and the designer abreast of technological developments over a broad field, for businesses large and small. There is a great temptation to carry on using traditional methods and materials and thus, as my hon. Friend said in the case of textiles, sometimes to fail to gain the advantages offered by technological advances. New materials such as composites or advanced plastics, new products and new processes, can allow a designer to rethink the entire constructional process, because the main


advantages usually stem not from a replacement of new for old but from a radical reappraisal in the light of new materials and processes.
The good, technologically up-to-date designer can frequently help to save energy in the manufacturing process, reduce the number of parts needed, improve productivity, and so decrease the cost of the product. Radical design can also enhance the product from a user point of view; for example, one of the objectives of car redesigns is to save weight and improve fuel economy by the use of plastics and composites as well as by the use of microelectronic engine and fuel control, combined with improvements in aerodynamics and greater knowledge of how internal combustion engines work.
Examples such as this stress the multi-disciplinary skills needed by the designer. How can this technological awareness be created and how can designers keep themselves up to date in the face of the information explosion?
One very important technique, which my Department is actively encouraging, is the use of on-line interrogation of computer data banks and data bases. Specialised data bases carry up-to-the-minute bibliographic information on technological developments; and data banks, often created by research associations and publicly sponsored laboratories, provide the latest data for design engineers. Many of these data bases can be examined remotely from the designer's own office. Within Europe, the Euronet data network offers over 250 individual data bases to users within the Community. The designer can gain access to databanks on almost every aspect of technology and can use comprehensive databases which will keep him informed of the technological developments in which he is interested.
As developments in information technology reduce the hard and software costs of on-line searching, we hope many more designers will be taking advantage of this cost-effective method of keeping in touch with technological advances and of gaining access to the latest design information and data. These are, of course, the essential ingredients to the incremental and radical product innovations which help improve industrial competitiveness and win new markets.

Mr. John G. Blackburn: Does my hon. Friend agree that the House is in the debt of my hon. Friend the Member for Shipley (Mr. Fox) for raising this important matter tonight, and that it will be pleased to hear a Minister talking about engineering skills, which are the lifeblood of this country? Will my hon. Friend take on board the thought that perhaps the answer lies in the Finneston report, which states that in this country engineering is a less popular occupation than male modelling?

Mr. Marshall: There is a lot in what my hon. Friend has said. He may find that we shall make a statement on Finnieston before the House rises for the Summer Recess.
I mentioned earlier the need to design for the international market and to incorporate international specification standards at an early stage. Too many United Kingdom products have been built to the narrow specifications of major United Kingdom purchasers both in the public and the private sectors. It is for this reason that we are interested in a sensible public sector purchasing

policy. Public sector purchasers should use the influence their purchases give them to help develop design technology and improve the international competitiveness of their suppliers.
In the past there have been too many instances of products not satisfying international standards. This was because the manufacturer had not paid attention at the design stage to the need to comply with international standards and regulations. To some extent, this technical barrier to trade will be overcome as European Commission directives requiring manufacture to European standards come into force in this country. That, incidentally, is one of the arguments about membership of the Community.
As I said earlier, design is not just a question of the outward appearance of a product. Beauty may be only skin deep, but good design goes much deeper. From the original concept onwards the designer should play an integral part in the process of development and manufacture of a product. This means that we need good designers. The key to this is education. My hon. Friend spent a good deal of his time tonight on that aspect, and I hope that he will feel that what we are doing is much in accordance with what he was urging upon us.
At one time we could rely on the apprenticeship schemes to provide the skilled practical engineering designers we needed. But, as Sir Kenneth Corfield pointed out in his report on product design, we are now increasingly reliant on universities, polytechnics and colleges to provide our future designers. I should like particularly to single out the work of the Design Council for which we see an important role, and which is sponsored and financially supported by the Department of Industry. This is the principal means by which the Government are active in this area. I have had several opportunities to study its work at first hand, and it is evident that the council has been vigorously persuading and encouraging the authorities, particularly those responsible for higher education, to develop courses on all aspects of design and also to improve the content of existing courses, redirecting them to match current industrial needs.
Partly as a result of the council's efforts, there are now nearly 1,000 courses in design available in the United Kingdom including short courses and ones aimed at particular sectors of industry. The schools design prize was launched in 1976 with sponsorship at first from GEC and now from Rolls-Royce, and has been a considerable success. The council set up a working party under Professor Keith-Lucas to examine design education at secondary level. The report was published in September 1980 and distributed to all secondary schools. It has stimulated considerable support. The council, with a grant from the Department of Industry's industry education unit, prepares audio-visual aids for teachers of design in secondary schools. The council also organises conferences and seminars on design education topics which are well respected.
But education in design has another aspect. It is not just a matter of providing the right courses for prospective designers. Both management and customer need to be educated also.
Through regular exhibitions and displays at its design centres—for example, a recent one included the Metro and the Escort—by publicising the advantages of good design through such means as the design index and the annual awards, by publishing books and magazines, the Design


Council is gradually improving customer awareness of the aesthetic, ergonomic and ultimate financial benefits that derive from products that are well designed from start to finish.
My hon. Friend was right also to point out that we are not talking about the traditional patterns of china and glass, important though they are. He will no doubt have seen this year's design awards at the Design Council, which included a wide range of products, including, for example, the latest in pneumatic pumps. That is indicative of the kind of realism he was urging upon us.
This, of course, is the kind of work the council set out to do in 1944 when, under the title "Council of Industrial Design", it was first established. However, in 1972 it was asked to add engineering design to its remit. In particular, it was faced with the task of impressing the management of engineering businesses with the vital importance of the design function in engineering activity. Since then the council has broadened its annual awards to include a wide range of particular industrial products.
The design advisory service was established in 1976 as a subscription club providing a diagnostic and advice service to members. It now has over 450 members who are assisted with analysis of product design and design management problems and are advised on suitable sources of outside expertise which can provide the solution.
Much of the Design Council's work reflects the overall interest and concern in my Department for the importance of design; and this process continues and develops. For example, next year, in information technology year, we look to the Design Council to play a full part in promoting information technology. It is in that sense of a continuing and important activity that I greatly welcome my lion. Friend's contribution in raising this key issue tonight.

Question put and agreed to.

Adjourned according at fourteen minutes to One o'clock.